Amazon (NASDAQ:AMZN) launched its own Appstore for mobile devices last year. While it is still much smaller than Apple‘s (NASDAQ:AAPL) iOS App Store or Google‘s (NASDAQ:GOOG) Android Market in terms of apps or customers, it has been gaining a lot of traction lately, primarily because of the success of the Kindle Fire, which is one of the most popular tablets to date. According to a recent report by Flurry, Amazon’s Appstore may be a much better option than the official Android Market (Google Play Store) for developers in terms of revenue generation potential. 
Flurry compared the average revenue generated by some top apps sold through the iOS App Store, Android Market and the Amazon Appstore. As expected, the iOS App Store ranked first, but surprisingly, the Amazon Appstore also fared much better than the Android Market. The average revenue generated by an app in the Amazon Appstore is more than thrice the average revenue generated by it through the Android Market.
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This finding could lead to developers focusing on the Amazon Appstore, optimizing their apps for Amazon’s tablets and other devices first, and could potentially lead to greater fragmentation in the Android ecosystem. Since Amazon takes a 30% cut off each app sale, it could also lead to a sizable alternative revenue source for Amazon, which has seen depressed margins in the last quarter due to Kindle Fire sales.
More importantly, it could shift the power in the Android ecosystem further out of the hands of Google, which has backed Android primarily to boost its mobile advertising revenues. Like Apple, Amazon is trying to build a complete ecosystem around its platform, but plans to make money by selling digital content instead of hardware. If it is able to get its Appstore on more Android devices by other manufacturers, it can generate additional revenue without taking a hit by selling its own hardware at a loss.
We currently have a $205 Trefis price estimate for Amazon, which stands nearly 2% above its market price.Notes: