If you have been hiding in a hole somewhere, today is the day that iPhone 3G launches with its vaunted App Store. It’s the first time I have seen developers excited about the mobile market since Palm’s heyday from 1998-2002.

I was also reading Fred Wilson’s blog on the subject of whether Apple iPhone software ecosystem will be anything like Facebook application ecosystem. If you don’t know, Mr. Wilson is a very well respected VC out of New York who has done a lot of web, some Facebook and one iPhone investment.

While I appreciate his perspective, I think he is making the wrong comparison. I think it is far more likely that the iPhone market will be like the early PalmPilot market than it will be like the Facebook market.

The make-up of the people buying iPhones seems to be identical to the PalmPilot market during the period of 1998-2001. The device sales are roughly similar. The frenzy is identical. In those days, Palm did a very good job of making users aware of applications even though there was no way to provide an on-device store. There were flyers in the box, developer programs that gave certain of us visibility. Software was still sold in retail so there was an opportunity to get into stores. There were tons of free download sites and partner companies who, in those days, partnered with us rather than ripping us off. In essence, what all this did, was make a lot of little companies just big enough to be small, but never big enough to be investable.

I’m not certain I see a lot of differences this time around. In fact, I think exposure when you are one of 30,000 apps all in the same store front will be impossible. And Apple is taking 30% of the margin, which seems like such a bargain compared to other current stores until you realize that this includes no marketing expense. A company will easily spend 60% of its revenue on marketing and sales (including reseller margins). Does this make a financially viable business?

Another consideration: will the eco-system for iPhone really become so large that there will be enough devices out there to make it worth a developer’s time to focus on it. In the old days of PalmPilot, approximately 60% installed applications and 50% of those paid for one (~30% bought third-party apps. The data was from some of my old notes provided by Palm). That means there is an available market of roughly 1M devices today. A developer will have to develop a pretty broadly applicable application to make that small number of devices work well in terms of sales, not to mention fight through all the noise. I will bet that there will be lots of products in those key categories.

Keep in mind that this is just an analysis of the iPhone opportunity. It doesn’t even include the broader challenges of mobile, some of which Apple is trying to handle.

This doesn’t mean the iPhone won’t be a roaring success. I think, as I have said before, that the iPhone and BlackBerry will dominate the US smartphone market. My guess is that iPhone, as a developer opportunity unto itself, will create a lot of little companies. The ones to invest in in the mobile space will be those that have a richer plan, a plan to leverage the devices, their personalized nature and their web connectivity across the entire ecosystem of mobility.