Amazon Appstore for Android launches in-app purchases

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Amazon unveiled its long-anticipated In-App Purchasing service, enabling developers to offer premium digital content and subscriptions within applications and games sold via the Amazon Appstore for Android.

Android in-app purchasing

Click here to view a video about Amazon's In-App Purchasing service.

Optimized for Amazon's Kindle Fire tablet and other devices running Google's (NASDAQ:GOOG) Android mobile operating system, the In-App Purchasing API supports the sale of virtual goods such as in-game currency and expansion packs as well as individual issues of periodicals. The service leverages Amazon's signature 1-Click purchase technology to simplify the checkout process.

Amazon Appstore for Android limits in-app sales to digital products, content and services designed for use within the app. Amazon claims a 30 percent cut of all sales enabled by the In-App Purchasing service, the same percentage it takes on downloads of premium-priced applications.

Amazon Appstore for Android grants Amazon the power to discount applications and games at its discretion, awarding developers 70 percent of the current sale price. Aaron Rubenson, director of Amazon Appstore, told TechCrunch that the company retains the same control over in-app pricing, but will give developers 70 percent of their suggested price point even if an in-app item is sold at a discount. "We're just following the paradigm that's out there with the 70-30 split," Rubenson said. "This is a little bit different from the revenue share that we have for paid app sales. We looked at each purchase case separately."

Amazon first confirmed plans to bring in-app purchase capabilities to the Kindle Fire in October 2011, weeks after the tablet began shipping to consumers. Because Google's own in-app purchasing technology requires access to the Google Mobile Services platform, it will not work on Kindle Fire, which runs a forked version of the Android OS. Rubenson said that developers are not required to adopt the In-App Purchasing API for Amazon Appstore apps sold to other Android-powered devices, but the API is mandatory for in-app sales designated for Kindle Fire owners.

Developers generate substantially greater revenues per user in Amazon Appstore for Android than in the rival Google Play storefront, according to recent data published by app store analytics firm Flurry. For every $1 generated by Apple's pacesetting App Store for iOS, Amazon Appstore yields an average of $0.89 per user, while Google Play earns developers just $0.23 per user, Flurry reports. It credits Amazon Appstore's success to the company's digital retail expertise, noting that Google's strengths are its search tools and advertising technologies.

In-app purchases are on pace to generate 64 percent of total mobile application revenues in 2015, up from 39 percent in 2011, IHS Screen Digest forecasted in January. The firm adds that in-app purchase revenues will rise to more than $5.6 billion in 2015, up from $970 million a year ago.

For more:
- read this release
- read this TechCrunch article

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Flurry: Amazon's Kindle Fire scorches rivals on Android app usage
Flurry: Amazon thrashes Google on Android app revenues
Distimo: Amazon Appstore developer revenues exploding
Report: In-app purchase revenues on track to eclipse $5.6B in 2015