One of the things that no one has really talked about much on the Android platform is the limit of installing apps to the internal storage (news to us), and not on the external Flash micro SD cards.  Apple allows you to install apps on the 8-64GB of storage that comes along with the iPhone/iPod Touch platform.  AndroidandMe exposes this significant issue with the Google OS:

The Droid ships with a 512 MB ROM which contains only 256 MB available for app storage. Google does not support installing apps to the SD card (and likely never will), so developers are limited in what they can create.

Google is all about the Cloud so this is likely something they’ve considered, but it will significantly limit what can be put on an Android phone like the Droid.  256MB is only enough for a few mid-sized games.  If you build a 50MB app for the Android platform, how many people will give you 20% of their phone’s app storage for it?

Update: It looks like there is a fairly easy way to hack the OS to store apps on SD cards.  Also, apparently Google is working on this issue for an upcoming release.  Another commenter says that apps can have calls to SD storage so all of the media can be stored externally.  For instance, in a first person shooter, all of the bitmaps and graphics can be stored on the SD card while the application runs from the internal storage. So it might not be as big a deal as originally thought. Thanks commenters.

Somehow I think Apple will exploit this in an upcoming commercial. via DF.

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