In the May 2011 app store report by Distimo, which covers all of the major app stores, the focus was on the lack of revenue being made by developers on the Android platform. One of the major findings was that:
20% of all free applications and 80% of all paid applications have been downloaded
less than 100 times in the Google Android Market worldwide to date.
These figures shows that paid downloads are not selling very well on the Android Market. In my opinion a major contributor to this lack of sales for paid apps is the fact that Android phone owners do not need to have a Google checkout account in order to to download apps. This means that they may never purchase an app and will always look for one that is free. This differs from Apple who will not let consumers download apps unless they have an iTunes account which must have a payment card associated with it. This means that the customer already has a payment mechanism in place and is therefore more likely to make impulse purchases that cost a small amounts of money.
This then raises the question, how can money be made on Android? There other solutions such as crippleware that offers limited functionality and then full functionality has to be purchased. This can be done using in-app purchasing, which could either be facilitated by the platform or by a trusted third party such as Paypal. However, this is a path less trodden and the success of this method is not well documented. The other alternative of course is in-app ads such as Admob. This may currently be the best option for Android developers given the tendency toward free apps, unless Google finds a way to entice the people who do not have a Google checkout account to create one.
Maybe the consumer will be more likely to purchase apps if more mobile networks implement carrier billing, allowing the app purchase to be added to the users telephone bill.