Meanwhile, in the ‘New World’, Tomi Ahonen, at Communities Dominate Brands, has a very long article on the Full Analysis of iPhone Economics - Then It Gets Worse. In summary, there’s a long tail of applications that make very little money.
Also, as Tomi says, "Everything written here, on both paid and free consumer apps, applies also to Nokia Ovi, Google Android, Microsoft etc app stores."
I see a time when there might be a stabilisation in the number of apps due to ‘natural selection’. As new devices are released, developers who created for fun or didn’t make any money for their effort won’t update their apps for new devices and might even remove them from stores as they get complaints from people who want them working on the latest phones. App store providers might even purge the stores of less useful applications. Indeed, Apple have already done this with some types of RSS generated apps. At the same time, those developing for the latest devices might increase their prices to make it worthwhile continuing development. You can already see this to a limited extent with iPad applications.