The tech blogs are buzzing with reports of Amazon.com's
What's in it for Amazon?
No doubt Amazon would take a generous revenue cut on the paid apps sold in its Android store. But just as important, having an app store helps defend Amazon's position as the online go-to for media -- books, music, movies, video games, and more. Currently, 52% of Amazon's revenues are generated by such media. Like book publishers, movie studios, and video-game makers, Amazon must prepare for a future when physical media -- DVDs, boxed software, and printed books -- become a rarity. The company's Kindle e-reader and Kindle apps help the company's position with books, but aren't enough.
What's in it for Google?
Google's Android has been a success in the wireless operating system market. How many products can you think of whose U.S. market share reached nearly 20% in barely two years? But, I would argue that Android's growth has come primarily from wide distribution -- Verizon, T-Mobile, Sprint
Apple's App Store is one of the biggest selling points for the company's iPhone and iPad products. Sure, the number of apps available for Android is growing rapidly, but a simple comparison of the quantity of Android apps to iPhone apps fails to capture the effortlessness of finding and buying the perfect app on Apple's store. An Amazon app store could help close that experience and accessibility gap, because the company's DNA is online stores. Google would lose some apps revenue that it might otherwise capture, but a successful Amazon Android store helps Google achieve its end goal of being the dominant mobile operating system and search provider.
An Apple eater?
I don't think a successful Amazon Android store would eat Apple's lunch, but Apple should take notice. An Amazon Android store has the potential to close a big competitive gap that exists now between Apple and Google.
Fool contributor April Taylor owns shares of Apple and Google. Google and Sprint Nextel are Motley Fool Inside Value recommendations. Google is a Rule Breakers selection. Apple and Amazon.com are Stock Advisor picks. The Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool has a disclosure policy.
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