Android Developers Blog points out that the Android Market app size limit has been expanded from 50MB to 4GB. The APK file still has a maximum size of 50MB, but developers will be able to bundle two 2GB expansion files, in whatever format they choose. The move is primarily to spur development of 3D games, as developers previously had to host the expansion files themselves.
Android applications have historically been limited to a maximum size of 50MB. This works for most apps, and smaller is usually better — every megabyte you add makes it harder for your users to download and get started. However, some types of apps, like high-quality 3D interactive games, require more local resources.
So today, we’re expanding the Android app size limit to 4GB.
The size of your APK file will still be limited to 50MB to ensure secure on-device storage, but you can now attach expansion files to your APK.
Each app can have two expansion files, each one up to 2GB, in whatever format you choose.
Android Market will host the files to save you the hassle and cost of file serving.
Users will see the total size of your app and all of the downloads before they install/purchase.