Amazon Appstore more lucrative for many devs than Android Market

Investment in Amazon Appstore (s amzn) is paying off in a big way for many top developers, a good chunk of whom are pulling in more money for their apps on Amazon than through Google’s Android Market (s goog). App analytics firm Distimo, in its latest monthly report, laid out how despite its much smaller collection of apps,  the Appstore is becoming a lucrative place for app makers to do business.

Distimo said that of the top 110 apps that appear in both the  Android Market and Amazon Appstore, 42 of them make more money on Amazon than on Android Market. Overall, 28 percent of the revenue in those top apps came from the Appstore. That’s a big showing for an Appstore that is less than one year old and has 26,826 available applications, compared to more than 400,000 worldwide for Android Market, according to Distimo.

Amazon Appstore is turning out to be a great place for paid app downloads, compared to Android Market which monetizes better through in-app purchase. Distimo said paid apps in Appstore made up 65 percent of all apps, while the percentage of paid apps in Android Market has slipped from 38 percent to 32 percent over the last seven months. Of the top 200 grossing Android Market apps, 66 percent of the revenue comes from in-app purchases.

The rise of Amazon Appstore is due in large part to the emergence of the Kindle Fire, which has been a major accelerant for Appstore and is now used more than any other Android tablet. In December, the total number of downloads generated by the top 100 apps in the Appstore increased fourteen-fold compared to two months earlier. While Android Market generated 22 times more new apps than the Appstore in September last year, by December and January, the number of new apps on Amazon had surged, cutting the Market’s advantage for new apps to about 5-1.

The fact that paid app downloads are bigger proportionately on Amazon than on Android Market may be due in part to Amazon’s pricing controls. One of the key differences between the two stores is that Amazon can change the price of apps, a provision that concerned some app makers. That control has apparently resulted in the average price of the top 100 paid applications in Amazon Appstore being 40 percent lower than in the Market. The average price of the top 100 applications is $3.76 in Google’s Android Market and $2.24 in Amazon Appstore. The game Monopoly (s erts), for example, was available for 99 cents in Appstore for a limited time last month, compared to a fixed price of $4.99 for the whole month in the Market. Amazon’s simple one-click check-out process and its overall reputation for commerce may also be driving paid downloads.

One interesting fact that emerged is that about 50 percent of Amazon’s apps don’t appear in Android Market, said Distimo. That suggests that, while many app makers are simply porting over their apps from Android Market to Amazon Appstore, a big number of apps are bypassing the Market and going straight to Amazon. It’s unclear if this is just Kindle-versions of established Android apps, but it still suggests that developers are making specific investments in Amazon apps.

The strong showing by Amazon Appstore appears to back up early anecdotal evidence I gathered in December, in which a number of Android developers reported seeing a big boost for paid app downloads on Appstore. It’s pretty amazing considering that a big proportion of these downloads is coming from just one device: the Kindle Fire. Appstore also provides apps for other Android devices, but it’s really shining because it’s the app store for Fire owners. Appstore benefits in some ways from its smaller base of apps, which makes discovery easier for users, who don’t have to wade through as many options. It will be interesting to see if Amazon can still remain as lucrative if its appstore attracts a lot more apps.

Overall, what this means for Android developers is that, if they’re looking to make money from paid downloads, they really need to think about Amazon Appstore. The work to submit an app to Amazon increasingly looks like a solid bet. And it may make sense for developers to look at the Fire as its own distinct platform. Android Market still has the largest reach compared to Appstore, which is still limited to the U.S. But more and more, we’re seeing how the Kindle Fire is providing an outsized impact on the Android ecosystem, which has gained a pretty potent way to make money from Android apps.