Amazon tests in-app purchases, enters app store battle with Google & Apple

Online retail giant Amazon is testing a new mobile app store service that lets users make purchases within the app itself, according to a report from BusinessWeek.

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An Amazon-branded app store would compete directly with both Apple’s iOS App Store and the Google Play store (formerly the Android Market). Amazon’s platform appears to allow both in-app purchases/upgrades as well as subscriptions, according to co-founder of fitness company Skimble, Maria Ly, who has been a part of Amazon’s pilot program for about a month.

Amazon will take a 30 percent cut of everything sold within an app, Ly said. That commission fee is pretty standard for app store platforms, and it’s also the same rate Apple offers to its App Store and Newsstand clients.

It’s unlikely that an Amazon app store with this kind of functionality would be approved for use on Apple iOS devices, as it would undercut Apple’s own business. Google’s Android OS doesn’t discriminate against competing app stores, so it’s likely that Amazon would be able to really gain some traction there. Since Amazon already operates its own Android app store, presumably the in-app purchasing service would be a direct extension of that.

The biggest benefit of an Amazon app store would be in boosting media sales from owners of its Kindle Fire tablet. At $199, the Kindle Fire is a loss-leader and relies on purchases being made via the tablet to generate a profit. So, an Amazon-branded app store with in-app purchases seems like a natural fit.

We’re contacting Amazon for more information about the new app store service and will update this post with any new information.