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This pithy bullshit comment is a disservice to the OP. He backs up his analysis with some interesting projected numbers and market research in other areas that experienced similar growth.
Let's look at some of his "projected numbers" and "market research"
Assume 1,000 application developers are competing in this market, 1.5 billion applications are downloaded annually, consumers pay a price of 99 cents per application
Only 1000 developers worldwide? How in the world do you arrive at that number?
1.5B apps/year? All of them are paid? The vast majority of downloads today are free apps. Without even giving a nod to the free vs. paid split, I am left to wonder if the author has ever used the app store himself.
$0.99/app? Is that just because most apps today are $0.99?
Also, what about in-app purchases and other ways to monetize apps (advertising, perhaps?)
Sorry, the projected numbers are pulled out of thin air, and I see no "research" to speak of.
The only interesting part imo, was the attempt to compare the app market to the automobile industry, but then he says: "The barriers to entry for developing an iPhone or Facebook application are much lower than producing an automobile, both in terms of capital investment and technological uncertainty. It takes just a few hours or days to develop a new iPhone or Facebook application...", which basically renders the analogy hopeless (and shows an incredible lack of respect for the complexity of many apps.)
I'm left with the distinct impression the OP doesn't have a clue about this market.
You're right. I stand corrected. (But on the other hand, the assumption that the free/paid split is 50/50 is ridiculous as well.)
It seems like he built an Excel spreadsheet, plugged in some different numbers for various assumptions, and then blogged about how the different inputs affected the outputs. I fail to see how this produces any meaningful new insight. It's basically just a first year MBA's homework assignment.
