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Amazon Throws Down the Gauntlet to Apple and Google: We’re Coming After Your Apps!

You’ve got to hand it to Amazon (Nasdaq: AMZN)… the company has some serious courage.

As I told you two weeks ago, it’s spreading its reach beyond the online retailing space. Specifically, into the mobile application domain.

And that means treading on some pretty big toes, given that Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG) currently dominate the market.

So it comes as no surprise that Amazon is already catching some heat. Less shocking still is the fact that Apple is the one with the major gripe.

Yet Amazon isn’t backing down. And in fact, it’s a very worthy challenger, as I’ll explain…

What’s in a Name? Ask Apple’s Hyper-Sensitive Lawyers

Apple’s complaint is Amazon’s use of the term “App Store” – a moniker that Apple has trademarked through the U.S. Patent and Trademark Office.

Amazon’s response? To remove the space, so its store is now called the “Amazon Appstore.”

I’m sure this was a pre-emptive move to bypass Apple retaliation. But Apple isn’t letting it slide. Because apparently, we’re too dumb to know the difference. In the words of an Apple spokesperson, “We’ve asked Amazon not to copy the App Store name because it will confuse and mislead customers.” Seriously.

No wonder Amazon never “provided a substantive response” to Apple’s repeated contacts before the court filing.

So where does Amazon get the gall to diss Apple like that? In a word: Confidence.

You Can’t Bully the King of the Jungle

Ridiculous legal bickering aside, Amazon is unstoppable right now.

Between the success of its cloud-computing branch (Amazon Web Service), the rampant growth in its Kindle e-reader sales and… oh, yes, its status as the world’s biggest online retailer, the company’s 40% overall revenue growth in 2010 was its highest since 2000. And CEO Jeff Bezos says the October-December period of 2010 was Amazon’s “first $10 billion quarter.”

To top it off, a study by research firm Millward Brown revealed that Amazon is the most trusted brand in the United States.

In short, Amazon isn’t going to get bullied. Not even by Apple.

Besides, Amazon’s only selling Android apps right now. So really, Google should be the one throwing a tantrum. Here’s why it’s not…

Superior Features Make Amazon’s Platform a Worthy Contender

The Amazon Appstore isn’t just another place to find cool Android apps for your smartphone. Its innovative features make it a formidable competitor in the space – even to Google’s native Android Market.

For instance…

  • Try Before You Buy: Unlike other app stores out there, Amazon allows you to “test drive” apps for free. Compare that to the Android Market, where you must purchase the app first – and then only have 15 minutes to return it if you’re not happy.
  • “App of the Day:” Amazon also offers a free app of the day, which promotes daily traffic to the store. Deals using Google’s platform are up to the developers’ discretion, and they’re not promoted in the Market.
  • Security: Amazon places some restrictions on apps it allows in the store. In this case, that’s a good thing, as Google’s completely open approach leaves users vulnerable to attack. (60 malicious apps were recently discovered on the Android Market.)

Bottom line: Amazon’s new Appstore platform loosens the stranglehold that Apple and Google currently have on the apps market. And since it promotes a level playing field, Amazon could easily market apps created by the Wholesale Application Community (WAC).

In addition, Google respects innovation. So instead of fighting Amazon’s Appstore debut, I bet the search giant ends up incorporating these superior features (or just Amazon’s app) in future Android releases.

It’s still early days for Amazon in the mobile app area. But given the company’s track record of success outside the retail space – particularly its ability to grab market share in the cloud-computing space – I wouldn’t bet against the company… or the stock.

Good investing,

Justin Fritz

Justin Fritz

, Executive Editor

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