Google Android Market is bigger: But Amazon Appstore sells cheaper apps sometimes at greater benefit to creators

The Google Android Market is by far the biggest Android app marketplace with more than 400,000 apps. But if you are developer looking to make money or Android device owner looking to get a deal, Amazon.com’s Appstore might be the better place to do business, according to a new report from Distimo.

With just 26,826 apps, Amazon’s Appstore is nowhere near the size of the Google Android Market. But the researchers at Distimo discovered that the average price of applications is lower on Amazon. The report found that all available paid apps are $3.13 in the Google Android Market, compared to $2.77 in the Amazon Appstore. For the 100 most popular apps, the cost savings are even greater on Amazon, with the average price of $2.24. That compares to $3.76 on the Google Android Market.

For example, Monopoly sold for just 99 cents on Amazon’s Appstore for a limited time in January, while it cost $4.99 for during the entire month on the Google Android Market. Amazon.com has a long history of competing aggressively on price, operating with the razor-thin margins of more traditional retailers.

Now, you might think lower prices equates to less money for the developers. But the authors note that Amazon — which sets the pricing in the Appstore as opposed to the individual developers — guarantees minimum royalties per sold app to developers.

An analysis during the last week of January examined apps that were available in both marketplaces that generated sales of more than $200 per day. That data set included 110 apps, both paid apps and those which made money from in-app purchases. (As you can see in the chart to the right, Amazon’s marketplace had a far higher proportion of paid apps).

Of those 110, 42 made more money in the Amazon Appstore.  The report also found that 28 percent of the total revenue for the 110 apps came via Amazon’s Appstore.

Those are impressive stats given the relatively youth of the Amazon Appstore (launched March 2011), and its fewer number of apps available for download.

“Since the Amazon Appstore is available on only a limited number of devices compared to the Google Android Market, it shows the potential of the Amazon Appstore for developers,” the authors write. It has been rumored that Amazon.com is kicking around plans for its very own smartphone, which could alter the app landscape even more.

The Amazon Appstore also has benefited greatly from the launch of the Kindle Fire, the best-selling Android tablet on the market. You can see the bump in November after the Kindle Fire was launched in the graphic below.

[Hat tip to GigaOm]