It appears that the tablet wars are just heating up. While no one can really argue that the Apple (News - Alert) iPad is the undisputed king of the tablet world these days, Amazon and Google are both taking aim in a big way. Amazon had actually fired its shots at Apple last fall when it released the Kindle Fire. Late last month it was announced that Google (News - Alert) is finally joining the fray as well.
While those were the big shots fired across the bow of the iPad, Amazon seems to understand that little maneuvers are needed as well. That would appear to be the main reason that Amazon has announced that they are looking at implementing in-app purchases in much the same way Google and Apple already offer.
Amazon had to find some new revenue stream, especially with the new buzz that has been surrounding the release of the new iPad. Amazon is now just testing the ability to purchase inside the app, but even the testing seems to be a sign that they are willing to get into a market that its two biggest competitors have been taking advantage of for quite a while.
Maria Ly, co-founder of Skimble Inc. saysthat the in-app purchasing would allow subscriptions as well as single item purchases. Ly’s company has been working with Amazon on the pilot program for a little over a month.
In-app purchases are attractive to developers of apps as well as the parent companies of the tablets and smartphones because they are another way to generate revenue after the initial purchase. This particular approach would be a big boon to Amazon because the company is already losing money on the production of each Fire. In-app purchases would go a long way towards cutting into that loss.
It would also draw more high quality developers such as Skimble, which is a personal workout company. A large majority of Skimble’s profits come from in-app purchases such as specific workout regimens. Inside projections say that in-app purchases will generate $5.6 billion in revenue by 2015. That revenue number would be a giant improvement from the $970 million raked in last year.
Edited by Jennifer Russell