Bill walked the audience through an economic argument as to why the most successful app developers will target multiple platforms, not just the iPhone. He’s right – if you’ve got the money, the scale, the know-how and sophistication to manage a big porting and test matrix, a lot of partner programs and distribution negotiations. His point is that the more handsets and end users you can target, the more money you can make. But there comes a point of diminishing returns, even with automated porting and testing tools. The question is not how much revenue you can pull in, it is how much profitable revenue.

Jason Jacobs, founder of RunKeeper and a successful iPhone app developer was also on the panel. When asked about his plans to port RunKeeper to other smartphones, he said he’s thought about it but right now is quite happy with his success on the iPhone. Jacobs says that the fastest route to greater profit for RunKeeper has been to expand his existing market through community building features, global reach, and product extensions to new sports and training methods. For RunKeeper, the point of diminishing returns has already been reached with just one target platform. Jacobs did not rule out porting to other platforms in the future, but he’s focused on profitability, not just maximizing revenue.

The iPhone is different from BREW in some very important ways. BREW has always been perceived as tied to Qualcomm’s CDMA-centric focus and to Verizon Wireless in particular. The iPhone is on the most broadly deployed network technology – GSM. The BREW certification process is perceived as complex and costly, designed to facilitate operators’ “walled garden” models. Verizon Wireless’s announcement today of a Google/Android partnership points to the end of that sorry era. While the App Store approval process gets dinged for being arbitrary and opaque, for most iPhone apps it is fairly smooth sailing by comparison. And lets face it – BREW never has had sex appeal – targeted at more low-brow feature phones. The iPhone fairly reeks of it. In an earlier post, I’ve talked about some of the ways the iPhone is disrupting the mobile ecosystem. You can see that disruption in action, watching Apple and AT&T’s competitors scramble.

The iPhone adopted the best elements of BREW: nearly zero fragmentation and integrated distribution, and ditched the bad bits – narrow network, small subscriber footprint, weak marketing and branding. Android has adopted both the best and worst elements of Java ME – broad footprint, open platform, fragmentation and a “wild west” competitive landscape.

Bill Scott said that fragmentation is an inevitable cost of the mobile marketplace, and that successful developers must just learn to live with it. With over 2 billion apps downloaded, Apple is disproving this bit of conventional wisdom. Google needs to manage their platform’s “diversity” if they hope to catch Apple in this very new world.