True, and that's where the "missing leg" of Amazon's current Android strategy comes in - they don't have an ad network to support free apps, unlike Google.
There's definitely going to be people who don't buy apps, and who don't install many in the first place, but for those who don't want to buy them (or don't have a credit card, quite common in most of the world), free ad-supported apps need to be in place.
If people can't afford to buy apps, can they afford a data plan, or to buy the advertised products?
I certainly think there's a necessity for free apps. I'm just not sure that there's any necessity for ad-supported apps.
Don't get me wrong - I'm certain that there are a lot of people who like to choose advertising supported products. I'm just skeptical that it's out of economic necessity.
It's not necessarily that they can't afford to buy apps, but that they live in an economy where credit/debit cards (and even bank accounts) aren't that common.
Most of Africa's like this, same with a lot of Asia - Visa and Mastercard have very little footprint there. Instead people use cash to buy pre-paid access from their mobile carrier.
You're right there's a question around what kind of adverts you'd display to them though.
There's definitely going to be people who don't buy apps, and who don't install many in the first place, but for those who don't want to buy them (or don't have a credit card, quite common in most of the world), free ad-supported apps need to be in place.