Mobile commerce and Amazon go hand and hand
According to Bloomberg, Amazon has been trying out a new service that will allow tablet owners to use mobile apps to make item purchases.
This is expected to give the online marketplace’s tablet, called the Kindle Fire, a significant place in mobile commerce among its users.
ABI Research data has shown that over the next five years, the total revenues from mobile apps – including in-app purchases and pay-per-downloads, as well as in-app advertising and subscriptions – will explode. In fact, they are predicted to grow from last year’s $8.5 billion to $46 billion by the end of 2016.
At the same time, though, ABI Research also warned that there are limitations to the in-app purchase model. It requires a broader user base if it is expected to achieve true growth.
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At the moment internet users already pretty much choose Amazon as their automatic option when shopping for books and movies to download. Using the in-app purchasing process, it is simple for downloadable software to be used to buy various items. This is encouraging not only for the future of Amazon, but also for mobile commerce app developers.
According to the Arvani Group’s Azita Arvani, using an in-app model allows developers to appeal to consumers and to have them download their “free” applications. Once the apps are downloaded, users are prompted to purchase additional products and services. The app itself is downloaded without any cost, but then the user is essentially given a catalog of options from which to choose and buy.
Avarni explained that “Offering in-app purchase capability is just a natural extension of providing an app store”, and went on to add that “It is not a big surprise that Amazon is experimenting with this model.”
Mobile users are increasingly using in-app purchases and retailers are recognizing this and are seeing this as a significant channel for growth. The revenues from in-app purchases over mobile are expected to have surpassed those from pay-per-download before the end of 2012, according to reports from ABI Research.
Overall, mobile app revenues are expected to skyrocket, and though it is currently limited to mobile game players, mobile developers other than those that create games are working hard to take a slice of that pie.