Yeah, this is a very poorly written article filled with bad assumptions mostly based on the current status quo.
Firstly the author is taking things too far by comparing the number of Android phones with tablets. Amazon doesn't have an Android phone. But they will most likely have the best selling Android tablet. And the argument is they may own the Android tablet market which gives them tremendous leverage.
"Google does not care about facilitating app sales because they can make 15-30x the money from search."
Here's he's taking the overall figure for all of Google's search revenue and just applying it to Android. That's not a fair comparison to app revenue. And assuming that Search Revenue > App Revenue, therefore Google does not care.
"Google clearly believes that the web will win out in the long term and native apps are a stop-gap, "
... Yeah, that's a big assumption based on a world before native apps.
"Amazon does not care about app sales... Kindle Fire is about selling more digital content and facilitating e-commerce"
Except apps are digital content and are a huge growth market.
Android 4.0 and beyond is designed to run on both tablets and phones. From Google’s perspective they are gateways to search so it’s completely reasonable to compare them to each other. From Amazon’s perspective the user behavior around commerce is very different, which is why they’re going after tablets first. There are rumors they will build a phone later as well.
I’m not applying the overall search numbers to Android. I’m saying that the amount of money they make off of Android pales in comparison to what they make off search today and what they will make off of mobile search in the future. App sales are going to be tiny compared to mobile search revenue (especially if Google believes that the web will win out in the long run).
Yes, Amazon would love to sell more digital content — apps included. The gross margins would be awesome for a retailer, so it’s clearly enticing for them. But most of the transaction volume flowing through tablets is not going to be in apps. It’s going to be in traditional e-commerce. As I said in the post, the apps will be an awesome secondary revenue source for them. But what they really want are all of the e-commerce transactions for electronics, movies, ebooks, clothing, jewelry, and everything else that Amazon sells.
Put it this way -- getting you to buy 1 item of jewelry through Amazon.com will be more profit than they'll get from all of the apps you buy over the life of the Fire.
Comments
Yeah, this is a very poorly written article filled with bad assumptions mostly based on the current status quo.
Firstly the author is taking things too far by comparing the number of Android phones with tablets. Amazon doesn't have an Android phone. But they will most likely have the best selling Android tablet. And the argument is they may own the Android tablet market which gives them tremendous leverage.
"Google does not care about facilitating app sales because they can make 15-30x the money from search."
Here's he's taking the overall figure for all of Google's search revenue and just applying it to Android. That's not a fair comparison to app revenue. And assuming that Search Revenue > App Revenue, therefore Google does not care.
"Google clearly believes that the web will win out in the long term and native apps are a stop-gap, "
... Yeah, that's a big assumption based on a world before native apps.
"Amazon does not care about app sales... Kindle Fire is about selling more digital content and facilitating e-commerce"
Except apps are digital content and are a huge growth market.
Thanks for taking the time to respond.
Android 4.0 and beyond is designed to run on both tablets and phones. From Google’s perspective they are gateways to search so it’s completely reasonable to compare them to each other. From Amazon’s perspective the user behavior around commerce is very different, which is why they’re going after tablets first. There are rumors they will build a phone later as well.
I’m not applying the overall search numbers to Android. I’m saying that the amount of money they make off of Android pales in comparison to what they make off search today and what they will make off of mobile search in the future. App sales are going to be tiny compared to mobile search revenue (especially if Google believes that the web will win out in the long run).
Yes, Amazon would love to sell more digital content — apps included. The gross margins would be awesome for a retailer, so it’s clearly enticing for them. But most of the transaction volume flowing through tablets is not going to be in apps. It’s going to be in traditional e-commerce. As I said in the post, the apps will be an awesome secondary revenue source for them. But what they really want are all of the e-commerce transactions for electronics, movies, ebooks, clothing, jewelry, and everything else that Amazon sells.
Put it this way -- getting you to buy 1 item of jewelry through Amazon.com will be more profit than they'll get from all of the apps you buy over the life of the Fire.