Amazon is currently working with mobile application developers to test a new service for its Kindle Fire tablet that lets users make purchases through apps.
Bloomberg is reporting that Amazon's service allows for purchases of individual items within apps, as well as subscriptions. The report cites Maria Ly, co-founder of Skimble, a physical fitness app, who has reportedly been involved in Amazon's pilot for about a month.
"It's still kind of in its early stages but we're very optimistic about it," Ly told Bloomberg of the services being tested. An Amazon spokesperson did not immediately respond when contacted by PCMag about the pilot program.
Google and Apple already provide in-app purchasing capabilities. Google launched in-app billing for Android apps in March 2011. In-app purchases have been available via Apple's App Store since October 2009 and via BlackBerry App World since September 2010.
In-app purchases are expected to generate $5.6 billion in revenue by 2015, up from $970 last year, according to January stats from IHS iSuppli.
Users "overwhelmingly" prefer free apps over paid apps, and it's becoming increasingly difficult for developers to justify charging an upfront cost for their apps with so many free options available, Jack Kent, senior analyst, mobile media for IHS, said in a statement. For this reason, developers are increasingly turning to in-app purchases as a way to monetize their apps. IHS predicts that soon, the dominant app monetization strategy will be to offer apps for free and then charge for in-app content.
"Games pioneered the in-app business model," Kent said. "Now the approach has proven so successful, companies building other types of smartphone app must adopt this strategy if they are to maximize their mobile app revenues."
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