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Amazon Appstore to challenge Android Marketplace, will it accept gift cards?

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Hey, remember when I said the Android Marketplace needs gift cards and the various Android app stores should work together on a universal acceptance format? Well, forget it. Amazon just dropped that idea in the toilet with the announcement of their own Amazon Appstore for Android, and I sincerely doubt they’ll give up their own gift card advantage to help the others catch up.

The official announcement is an invitation to developers, not an open for business sign. Obviously, they can’t sell any apps before they’re submitted, but the nature of the announcement indicates they’re letting everyone in at the same time as opposed to giving so-called premium developers a head start. That’s a good sign for independents.

Among the advantages they cite are the access to the tens of millions of Amazon customers, exposure via Amazon’s marketing and merchandising machine including their recommendation system, and the convenience to customers of purchasing through Amazon, the rockstar of online buying. Their developer program fee is $99 annually but they’re waiving it for anyone who gets started now (not sure how long “now” lasts).

TechCrunch offers further insights from Aaron Rubenson, category leader for Amazon Mobile Services, and Ameesh Paleja, general manager for the Engineering Division of Mobile Services. Amazon does institute a screening process to weed out buggy, illegal and/or porn-oriented apps, but they won’t be as scrutinizing over the content as Apple is.

However, where they will retain control is pricing. In a manner similar to how book sales are handled, developers can list whatever price they want, but Amazon reserves the right to discount that to fit what they think will maximize profit. Given Amazon’s experience in this area, it’s probably a winning proposition to trust them on pricing, but I’m sure they’ll upset a few people in the process, while others will refuse to go for it. Developer revenue share is 70%, same as everyone else, with a guarantee of 20% of the List Price in case of deep (or complete) discount. And if you’re thinking about gaming the system with a high list price, remember the screening process and if you list an app on multiple app stores, you’ll be pricing it against itself.

This is a massive shake-up in the app store war. While Amazon brings its clout to bear against Apple, it raises much bigger questions for everyone in the Android app pool. Not only does Amazon bring a vast supply of paying customers (and gift cards) to the table, but their control over pricing means they can potentially undercut their Android app competitors on the exact same product, just like they do with books. There is a whole different set of variables to consider with this announcement. The analysis is far from over.

Alleged Apple fanboi, accused Android apologist, and confirmed Microsoft MVP for touch and tablet Mark Sumimoto a.k.a. Sumocat dabbles in all areas of mobile computing with a focus on Windows-based Tablet PCs and pen input. A mobile computing enthusiast since 2004, he pioneered the field of ink blogging via his personal blog, Sumocat's Scribbles. His current tools include a Fujitsu Lifebook T900, TEGA v2, and iPhone 4. Email: sumocat [at] notebooks.com