There’s been a lot of talk over the past few days about Amazon trying to buy developers by giving them $5,000 to build an app for the Fire Phone, up to a max of $15,000 for three apps. When I first heard this story, I thought Amazon’s plan was misguided, that they’d lay out a ton of money to buy their way into undisciplined relevancy, with an indiscriminate copy of apps that are available on Google Play and other Android app stores. Sort of a “me too” strategy.

But that’s not quite right.

First off, Amazon is not offering cash to developers. They are offering 500,000 Amazon Coins, which Amazon values at $5,000, that developers can give away for promotion:

Amazon will offer 500,000 Amazon Coins ($5,000 value) for each of your qualifying paid apps or apps with in-app purchasing that meet the additional program requirements for Fire phone (up to 3 apps per developer). You can create campaigns via the Promotions Console to give these Coins away to consumers purchasing any of your paid apps or in-app items.

This is very different and, I think, a smart play. Rather than a cash bounty, which will draw short term thinking developers, Amazon is giving away something that will help developers build their business. I think this will bring in more long term thinkers, more apps with a story to tell.

Amazon has also laid out a specific set of requirements that will ensure that these apps are unique to the Fire Phone, taking advantage of Amazon’s various APIs, where they apply and, in addition:

Games must use the Dynamic Perspective SDK to create an in-game experience that responds to a user’s motion relative to the device. Note that games that merely replace swipe-based controls or gyro functionality with head tracking will not qualify. The game must use head tracking to implement an in-game experience. Examples include the ability for a user to pan and zoom the field of view in a game by moving the device back or forward or the ability to rotate the device about any axis to change the viewing angle of the surroundings.

Here’s a link to the requirements page.

And what does this mean for Apple? If the Fire Phone does get some traction, I think this success will further splinter the Android software universe and raise competition with other Android phones, as well as with Samsung and their new OS, Tizen, a Linux-based open-source Android competitor.

I don’t see Fire Phone eating into the iOS market share. The Fire Phone might have a few compelling features, but it does not offer enough of a critical difference from other Android phones to pull iOS users out of the iOS ecosystem. In other words, though there will always be drift from iOS to Android and back, the Fire Phone does not critically change that balance.

And this kind of feedback does not help.

Will Fire Phone succeed? Everything I’ve read about Amazon’s development program tells me they will achieve some level of critical mass. Amazon has the cash to ride this out, if developer adoption takes time. The key, I think, is that they are aiming to compete, quality-wise, with Android, and not with iOS. A smart decision.