Most Android Apps Are Free. Why does it matter?

Distimo has published their June 2010 report on app store sales, and it again shows that Android has more free applications in the Android Market than of any other mobile app store and that it has more free applications than paid applications. The message behind the report as implied by the web sites posting about it is that Android is less appealing to developers, but I am wondering if all the focus on paid versus free applications is pointless.

There are two reasons why I think the focus of paid versus free is wrong, iAds and AdMob, which are the two mobile advertising networks for the iPhone and Android platforms respectively. I am a typical Android user who has more free apps on my Nexus One than paid apps, however, just about every one of the free apps I use have advertising. Clearly developers are making money from the advertising in the free apps that I am using.

I think application stores should only be a small part of the decision process for developers deciding on which mobile platform they should write programs. Another important criteria is the potential size of the market, and simple math shows that Android, which is available for all four of the major U.S. carriers, has a bigger market opportunity than iOS, which is only available on AT&T. Not only is the total number of customers of each carrier a factor of the market size, but also the number of different handsets the operating system runs on. A developer that decides to only write programs for the iPhone is limiting themselves to one handset on one carrier.