Apparently Google is upset that users aren't buying more Android apps through the Android Market. This isn't a new problem but it sounds like it's a growing concern within Google. The reasons why Droid users are reluctant to pay for an app are numerous but I have to wonder if one of the biggest obstacles is that users have become conditioned to expect free apps? This is purely anecdotal, but my friends who own Droids will not buy an app because they think they "shouldn't have to." They're not representative of all Droid users, but I wonder if a different mindset exists between Android apps users and iPhone app users? I'm an iPhone owner and I don't share the pseudo-communist take on "all apps should be free." I paid $9.99 for an app that I use on a weekly basis and it was worth it because it works well and it provides a utility.
I also have to wonder if the experience of shopping for and browsing Android apps contributes to the lack of downloading. Just looking for the Android app store is challenging. If you Google "droid apps" the top search results are for non-Google affiliated sites. Compare that to "iphone apps" and the top search results are for the app store on iTunes and Apple. In addition, Google has not invested in the kind of broad-based marketing to build name recognition for the Android Marketplace the way Apple has with its app store. Even if you don't own an iPhone, you know you can download iPhone apps from the app store on iTunes; with the Droid, not so much.
Finally, Google drives users to search for Droid apps via their phone rather than through a website. There are times when searching for an app through a smartphone isn't convenient - a web-based app store would be easier to navigate. However the Android Marketplace website doesn't even include the ability to search for apps - it only allows users to browse featured, top free, and top paid apps. Lest there be any confusion, Google posted the following on the Android Market site - "For a comprehensive, up-to-date list of the tens of thousands of titles available, check out Android Market on your handset." That's a user experience fail.