I think the implication is, that increased market share means that third party developers will pay more attention to the platform and develop more and better apps.

My take on this is that a lot of smartphone users don't really care that much about apps beyond the core features that come with their phones. These people are happy with Android phones because the Android email & web apps are as good as, if not better than, their iOS equivalents. If you look at Apple's app store sales its really games that are driving their volume and I think a lot of people just aren't that interested in mobile games.

So I won't be surprised if Android continues to develop market share but never becomes quite the same app ecosystem.

Neither do I. I think he's implying that if more people will buy android then android will get better because of it.

Which would make sense if Google got more income for every copy of Android sold. But they don't.

Sure they do - Google is the default search engine on most of those devices. Granted, not enforced, but still.

It's also the default search engine on Safari in iOS, so I'm not sure there's a point to be made here.

That can change whenever Apple feels like it. Not so with Android. With mobile exploding, Android is excellent insurance for the future.

Android handset manufacturers can change search provider whenever they feel like it. Aren't a few already sold preset to Bing?

yeah, like netbooks versus macbook air :-)

Is there such thing as a $999 netbook? If you're not competing in the same price range it's easy to be better.