Android is a very hot platform for mobile developers. Indeed, a recent report indicates it may be the hottest platform.

Mobile Developer Economics 2010 and Beyond, from VisionMobile, states that “Android stands out as the top platform according to developer experience, with close to 60 percent of developers having recently developed on Android.”

[login]Despite Android’s popularity among developers, the platform poses a number of problems for individuals and small companies that actually want to get paid for their apps — as opposed to wanting the ego gratification of creating something and hoping Google ad traffic will turn an app into a viral success.

Here are some red flags about developing for Android:

Too Many Free Apps in the Android store

The Android store, charitably described as immature by some observers, is clearly no money pit for developers. Fifty-seven percent of apps in the Android store are free, which compares with 22 percent in the Windows Marketplace, 26 percent in the BlackBerry App World, and 28 in the Apple Apps Store — iPhone, according to a June report published by web store analytics firm Distimo.

The above is important because most developers, particularly the small ones, want a paid app because it is a direct revenue stream. Pursuing the free/ad route is much less desirable. Unless developers can build a large and loyal following, they will not be able to generate much revenue, since most of the revenue will be based on Google ads.

The high proportion of free apps on Android is the result of two factors. First, Android’s open-source operating system attracts software developers who like giving away their creations instead of creating a business. Second, getting an app into the Android store is much less of a hassle than, for example, getting an app into the iPhone or BlackBerry store.

Apple’s slow, at times mysterious process of reviewing apps has caused some developers to abandon the iPhone.

Piracy, a Boatload of Trouble

The openness of the Android platform presents an open invitation to piracy, which is pretty rampant on Android. This is one of my favorite sites: http://nexusonehacks.net/nexus-one-hacks/android-hack-how-to-install-paid-android-apps-for-free/. The site, which gives visitors the skinny on how to download paid apps for free, comes with this curious warning: Downloading Paid Apps is probably illegal and we don’t advise you to do it, this is for informational purposes ONLY!

Pirating Android apps is as simple as copying a file. Strangely, Google lacks a system to prevent paid apps from being given away on one of the many black-market sites.

Android’s Fragmented Market

There are four versions of Android — 1.5, 1.6, 2.0, 2.1 and 2.2 — with two dominant ones. Google’s own figures, as of September 1, show the following breakdown: 1.5, 12 percent; 1.6, 17.5 percent; 2.1, 41.7 percent, and 2.2, 28.7 percent. The figures are based on the number of Android devices that have accessed the Android Market within 14 days, ending on September 1.

Obviously, too many flavors of Android is a bad thing for developers. It forces developers to make very difficult choices — developing just for the latest platform or creating three different code bases to reach most of the market. Developers who decide to focus on the latest Android platform — thereby minimizing their coding time — will ignore some 70 percent of the market.

Developers who pursue the latter choice will spend a lot of time and sweat, knowing the inevitable — there will be another Android version soon that will further fragment the market. Google has tentatively scheduled the release of Android Gingerbread for 4Q 2010 and Android Honeycomb for 2011.