It didn't cost him anything (I met him at iPhoneDevCamp a month or so ago), and he did it part time (I think his first iteration took 2 weeks) while holding down a full time job.
It's a tough call, but note that the iPhone is not the smartphone market leader -- Blackberry is. Android could outsell iPhones solely by cannibalizing Blackberry sales, although it obviously has other opportunities: Windows mobile users, Palm users, people who want something like the iPhone but don't want to switch to AT&T, etc.
I think with Android the 'pond' will be much larger and will make $250K look quaint.