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Amazon's Android App Store is Bad News for Apple

Amazon (AMZN) officially opened its Appstore for Android, an application marketplace for the popular Google (GOOG) mobile operating system. Not before Apple (AAPL) could sue Amazon for alleged trademark infringement, though.

The upshot? Amazon's foray into selling Android apps is a big deal, whether you're a consumer or a smartphone vendor, and it could indicate an Amazon move to become a tablet company.

A bump for Google
As my BNET colleague Damon Brown notes, the Android marketplace means a better buying experience for consumers. The more that consumers like the sales experience, the more likely they are to increase their app buying, strengthening Android as a platform for third party app developers.

One of Apple's mobile computing strengths is the App Store. Even if sales are concentrated in a small number of apps, developers think they have a chance at making money, and so they write software. The number of apps, which Apple continuously emphasizes, becomes an imprimatur of market acceptance and helps draw in customers.

Seeing competition from an Amazon marketplace for Android apps is a concern for Apple and probably the main reason it decided to take action. It couldn't be just the use of the term "app store" because, as ReadWriteWeb notes, other companies have done the same, including Google, Verizon (VZ), and Nokia (NOK). Under U.S. trademark law, Apple may have left itself up the creek by not vigorously pursuing those possible infringements. (In addition, Microsoft (MSFT) is challenging Apple's trademark application as being generic.)

Time for an Amazon tablet
From Google's view, it's all good news. A company that really knows how to sell software, music, books, and video online has decided to use its customer understanding and resources to create a marketplace. Google has seemed ambivalent about its own Android marketplace -- sure, it created one, but then sort of left it on its own. Ultimately, the money for Google will come from ads, and having applications on phones can only improve the company's prospects of success.

Amazon only has 3,800 apps at the opening, but expect that to sharply increase. Especially as Amazon is featuring free daily downloads on apps that would otherwise require payment. The company is happy to run some loss leaders if it can get enough Android users to frequent its online market.

Aside from making the Android app purchase process more appealing, the move also shows Amazon's interest in Android. Perhaps that only goes as far as selling apps, but the Kindle is Amazon's best-selling product. Tablets present a danger, as they can play or display video, music, ebooks, digital periodicals, and Web pages. The functions of a Kindle are more limited, and that spells trouble.

Amazon could badly use a product that competes directly with an iPad or RIM PlayBook. Amazon already has some of the right instincts in design: light weight and long battery life. By shifting to a hardware platform that would support Android, it could round out its product line and put off competitors. Furthermore, there were signs last fall that Amazon might have broader ambitions for the Kindle.


Image: morgueFile user clarita, site standard license.
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