Amazon, the world’s largest Internet retailer, is set to allow users make in-app purchases within Android apps sold in its online store. This would match a feature already offered by Apple and Google in their respective app stores.
Danielle Kucera for Bloomberg:
The new software enables developers to charge for digital content and subscriptions, Amazon said today in a statement. Walt Disney Co. (DIS), Conde Nast, Gameloft and Dow Jones & Co. will be some of the first participants after testing out the service with Amazon over the past three months, the company said.
“Allowing for in-app transactions is now basic functionality for app stores, and this is necessary to help Amazon even the playing field,” said Colin Sebastian, an analyst at Robert W. Baird & Co. in San Francisco, who says he expects Amazon shares to outperform peers. “Without this, I think Amazon’s app store would be at a disadvantage.”
Making it easier to charge for items within apps may make developers more willing to write software for Amazon’s store. The feature will also supply added revenue for the retailer, as it will take a 30% commission from every in-app purchase. The apps are part of Amazon’s strategy to increase demand for its Kindle Fire tablet, and digital content in general.
Currently Amazon’s app store is playing catch-up with Apple and Google. It contains 34,000 apps, up from 4,000 when the store debuted in March 2011.
According to research firm IHS, selling items from within downloadable apps will generate $5.6 billion in revenue in 2015, up from $970 million last year,
“A number of developers have indicated that this technology is important to their business models,” Aaron Rubenson, director of the Amazon Appstore, said. “For apps that really need this to be viable, this is an important step. It will allow us to bring new apps to the store.”
