One of the most interesting developments in the Android ecosystem these days is the emergence and rumors surrounding Amazon. Quickly, the rumor: Amazon will release an Android-based tablet. Why do I find this interesting? Because Amazon is one of the few companies who can thumb their nose at Google and get away with it.

To understand why, we first need to dig into the revelations from the Skyhook-Google lawsuit. In this lawsuit details about how Google controls the platform are being revealed (read here):

1. Google requires its approval for any device that includes Google’s applications
2. The carriers require all Android apps to have Google’s applications.

This double-edged sword makes it impossible for a third-party to take Android, put it on a device and sell it through a carrier without Google’s approval. And that’s exactly what the Skyhook lawsuit — a third-party provider of location-based services — is all about. In short, Google is keeping Skyhook off Android devices by making Google’s location-based services one of the required apps.

And this is where Amazon and its tablet plans come in. Amazon, unlike almost every other company on the planet, has the technology, marketing and distribution muscle to thumb their nose at Google. Let’s refer back to how Google maintains control:

1. Controlling apps: Amazon could develop their own or license third-party apps. Probably the most important app is the App Store, which gives Amazon access to all kinds of third-party applications and, of course, Amazon has their own store.
2. Carriers: Amazon doesn’t need the carriers to sell their devices. In fact, Amazon has done pretty well without carriers when it comes to the Kindle.

I would say that the hardest thing about being small is staying out of the way of giants. This was my persistent thought after hearing Steve Jobs’ WWDC keynote speech Monday.

For starters, Apple (and Google and Microsoft, etc.) integrate features that used to be available only by third-party products. Remember the Milk will be replaced for many by Apple’s new Reminders app. Instapaper will be replaced for many by the new Safari Read Later feature. 200 new features each year mean lots of big and small apps, that used to do something for their customers and drove revenue, will now either be obsoleted or be searching for higher ground.

As the maker of very fine calculator apps for iOS devices (and before it Palm, Windows Mobile, Windows and BlackBerry), I have first-hand experience with this problem. In the beginning there was a simple four-banger (plus, minus, times and divide) calculator bundled. Then scientific functionality was added. Then, like on BlackBerry, currency conversions and tip calculations were added. As a developer of competing apps it has meant a continuing hike toward higher ground — algebraic and RPN entry, specialized settings, specialized calculations — that also made our product more niche, more designed for power users. And this has also meant, with app store pricing, lower and lower revenues from said products as our niche of customers looking for a power user product has shrunk. [1]

This doesn’t mean that Reminder apps and Read Later apps can’t survive and do well. After all, the market for those kinds of apps with speciality features are likely larger than the group of people looking for a high-end calculator. But competing with Apple is a losing proposition and these developers need to know that Apple just swallowed 60-80% of the existing users with their general purpose, bundled apps.

This isn’t the only being stepped on by giants moment I had Monday. The other squishy sensation focused on business models. In my time in mobile, productivity app revenue has shifted substantially. It used to be $20-50 for the app, $10-30 for an upgrade. Not only is the upgrade revenue gone but so is the high price points. Now $5 is expensive and $2 is the norm.

So business models have been shifting. Many productivity apps are now free to use or free to try and then charge money through web-based subscriptions. Apps like DropBox and Evernote, as two examples, utilize this business model. The big selling point: move data between platforms quickly and easily, have it backed up in the cloud so you don’t have to worry about failed local computers, and gain access everywhere.

I heard a shot across the bow of this business model, too, on Monday. With Apple’s new iCloud storage API any app can back up to the cloud and have instant access to everything on all devices and systems. There are even API hooks for Windows and Mac. Apple, of course, integrated this feature into a number of their own apps and the entire feature is free to both developers and users. I am concerned that the expectation now is that this capability, previously a big seller for apps that wanted to charge a subscription, is free and another business model, for appropriate apps, will go by the way side.

It is too early to tell whether this is the case but it seems, just like apps who have bundled counterparts are constantly searching for higher ground, so are mobile apps with web counterparts doing the same. Only in this case it isn’t the low-hanging features that are endangered. It is the entire business model.

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[1] Rule of thumb: if you find it in Mac OS X you will eventually find it in iOS.

Everybody Pauses and stares at me
These two teeth are gone as you can see
I don’t know just who to blame for this catastrophe!
But my one wish on WWDC Eve is as plain as it can be!

– from “All I Want For Christmas Is My Two Front Teeth” (slightly modified)

This is the wishing season, a lot like Christmas. All of us Apple users and developers sit around the computer screen (or in person like I did last year) on Monday morning of WWDC waiting to hear from Santa Claus… err, I mean, Steven P Jobs… about what goodies are in store for the Mac and iOS operating systems for the next year.

Procrastinators sit around talking about what we will get like parents talk about this year’s hot new toy: enhanced notification, the end of syncing our devices via a desktop computer, music in the cloud. Usually Apple pulls some goodies out of the bag that no one has heard about but will turn everyone’s head, too. (Cabbage Patch dolls!)

But I have to admit that the more I think about all these other things, the one I want more than any other, the one no one else is talking about, the most mundane of the bunch, is improved auto correct. Personally, I’m tired of having to re-read every email I send out for Apple-corrected grammatical errors and tired of the fact that I type a hundred times faster than the auto-correct can keep up. I’m tired of the capital letters in the middle of sentences, tired of Apple deciding every time I mean apples I really mean Apple’s, tired of the word its always being “corrected” to it’s. I’m tired of auto-correct being needed 100% of the time, it being right 80% of the time and horribly wrong the other 20%, a very un-Apple like lack of perfection.

But most of all, I’m tired of being embarrassed by the Apple-induced spelling and grammar errors. It’s almost as if I lost my two front teeth.