In my opinion, several steps in your chain of reasoning break down.

> 1. Amazon is --- probably, and for the next 18 months or so --- going to have the most popular Android tablet on the market.

In the US market. Until and unless Amazon changes it the Kindle Fire (like the Nooks) are irrelevant internationally. In addition, making the Kindle Fire international is easier said than done. With a few exceptions, Amazon needs to secure rights to sell movies and music overseas (books are taken care of, for the most part). A further complication is that Amazon's Cloud Player currently relies on recent court decisions codifying fair use rights (with respect to media storage and streaming) that may not exist in other countries.

> 3. Android developers are going to be compelled to deliver software to Amazon users, because Amazon is going to supply a plurality of the entire addressable market for Android apps.

The only plurality Amazon has a chance of capturing in the foreseeable future is "Android tablets in the US". An interesting slice, to be sure, but one of many.

> 4. To supply Amazon users with Android apps, developers have to use the Amazon market.

False. The Kindle Fire permits side-loading (and it is no harder than side-loading Amazon's Appstore onto a typical Android phone). Alternative app stores (e.g. GetJar) are going to promote themselves and give even Kindle Fire users incentives to install them (e.g. GetJar's time-limited exclusive. Beyond that, prominent open-source software available for Android (e.g. Firefox, Connectbot) isn't in Amazon's Appstore, giving users another incentive to sideload.

> 5. Not only will developers need to use the Amazon market to address Amazon customers, but off-brand Android users can (and may) also end up relying on Amazon's market.

Off-brand users are most likely getting an app store by side-loading anyway, so I don't see how they're going to end up relying on one store to the exclusion of others. It seems more likely that each store will have its pluses and minuses and off-brand users will choose between them on that basis.

The resulting fragmentation along device type is the biggest problem for developers. Google is trying hard to unify the phone and tablet, but Amazon is throwing a wrench into that strategy. Amazon can dictate the terms of Android tablet app distribution, further complicating matters for Android developers.

Considering that Ice Cream Sandwich addresses most of the negatives from early Kindle Fire reviews (e.g UI lags, disappointing browser, screenshots, etc.), I don't think Amazon's "wrench" is going to last that long. At least one tech journalist has claimed that they have a source that says Amazon is already working on the Fire's ICS upgrade.

Amazon isn't selling the Fire as a tablet, so they are already trying to differentiate themselves from the rest of the android tablet players. With their unique position of having their own app store and being a platform player, it's clear to me that their plans are beyond simply being another android device manufacturer. If they gain a dominant position in the android tablet space, it will be natural for them to try to gain power over the platform. It will be interesting to see if Google can improve their tablet fortunes and get consumers go for the normal ICS tablets.

I do understand the points being made. I'm saying those points are not really the points that matter. Positioning Amazon's moves as having deep ramifications on developers misses the real implications of Amazon's moves.

Everything you've outlined are concerns for developers, not for Google or Amazon. And as painful as it may be for small, independent developers...we're not what really matters in these ecosystems. Regardless of who owns the app store, we're going to stay irrelevant.

The real dollars are in commerce, search, and the gateway to these is going to be mobile. That's the real implication -- not a few hundred thousand developers getting yanked around and having to go through 4 app store approvals processes instead of 2.

I have to agree with avichal. I look at it more like JC Penney/Ross/Marshall/etc. All of the stores have distribution and pricing models. That does not mean that the clothing industry is fragmented or that Gap will suffer.

It is a good thing for Google that Amazon sells more Android powered devices. It helps them that more people are online. Regardless of how many apps are sold or how easy or tough it is to install etc - the fact remains that the web is way more interesting and easy to navigate than an app.

As long as they can get you to the web...through any mechanism possible - they win.