Now Open: Amazon Appstore Launches With 3,800 Apps for Android

Amazon has officially launched the Android Appstore, a potential iTunes equivalent for Android.

The company–whose roots are in e-commerce and not mobile–aspires to merchandise and sell apps better than Google does on its own platform.

And, potentially as well as Apple, which up until now has been the shining star in mobile.

Beginning tonight, the Appstore will be accessible online at amazon.com/appstore. Android owners will also be able to download a version of the store to their handset. The store will support hundreds of mobile operators and hardware manufacturers.

Amazon has been recruiting developers since at least January to convince them to get on board with the venture. Initially, users will have access to a catalog of 3,800 applications.

While selling apps is not a particular stretch for the company since it already dabbles in a lot of digital content, like music and e-books, working with mobile developers is not exactly a home run since their time and attention is fragmented among so many competing stores and platforms.

However, the company’s efforts seem to be paying off.

At launch, apps will be available from dozens of developers, spanning big names like Gameloft, Handmark and Glu Mobile. (It’s also worth noting that its efforts have also not gone unnoticed by Apple, which is suing Amazon, claiming trademark infringement and unfair competition over the name.

To start, the store will be nowhere near the long tail of applications found on Android Market or Apple iTunes, which respectively have catalogs of roughly 150,000 and 350,000 applications. But Amazon is trying to make a big splash in terms of quality. The store launches today with an Angry Birds exclusive to its new hit game based on the movie Rio.

“The developer response has been really strong,” said Aaron Rubenson, category leader for Amazon Mobile Services. “We’ll be launching with a broad range of paid and free and the customers will find lots of best selling titles from Doodle Jump to Call of Duty to Zagat and Tweetcaster. The list goes on and it’s just day one. We are adding more every single day.”

One problem that Amazon is trying to solve is discoverability.

While there’s a huge number of apps in the market, customers have a hard time finding the ones they want to buy. Conversely, developers have a hard time monetizing.

Amazon will be doing four things to help with that:

• Amazon will offer one free app a day to help with promotion.
• Amazon will offer a feature called Test Drive, which will allow a customer to try an app out before they buy. The technology is using Amazon’s cloud services. Users will be able open and use the app from within their computer browser. The simulation will last for about 30 minutes at which point they’ll have to buy it.
• Lastly, Amazon will drive recommendations based on a user’s purchase history. If they are someone who purchases cook books and high-end utensils, Amazon may recommend a recipe app.
• Amazon is also enabling one-click purchasing for anyone with a credit card on file.

The retailer is also doing a few uncharacteristic things, including being the one to set the price of the app.

For instance, if the developer recommends the app be sold at $1, and Amazon agrees, they’ll make 70 percent, or 70 cents on each download. If Amazon decides to make it free for a day, the developer will make 20 percent off their original recommendation of $1, or 20 cents. The developer will always make whichever is greater.

Rubenson said the response has been positive. “As we’ve gotten closer to launch and have talked more tactically about our merchandising capabilities and programs, they [developers] are getting very excited about the potential.”

Amazon is clearly banking on Android’s success since it is unlikely to ever sell iPhone applications on Apple’s closed system. With more than 300,000 phones based on the operating system being activated everyday, and many more tablets coming, the company sees it as a very large opportunity.

Rubenson said Amazon works closely with Google in a number of ways, especially as a major reseller of its devices. It also maintains a site called Android 101, which teaches customers about the OS. “In that regard we are engaged on multiple fronts,” he said. “But one of the strengths of the OS is the openness. We’ve taken that and focused on making the best possible store for customers.”

So far, Amazon will mostly rely on driving traffic to their store through their own referrals. However, increasingly they expect to partner with carriers or handset makers. Rubenson said its first third-party partnership will be with Cellular South, which will make the Appstore available to its customers through preloads and other methods.

He declined to discuss revenue splits or the financial relationship with partners.