Up until recently Android applications have been limited to a maximum size of 50MB on the Android market because most apps do not require more than that. However more and more developers are launching high-quality 3D interactive games which require more local resources due to the high demand of such games coming from users.
Android Developers team announces the expansion of Android App size limit to 4GB (4000MB), but your APK file will still be limited to 50MB to ensure secure on-device storage, where you can now attach expansion files to your APK splitted in two expansion files each one up to 2GB in whatever format you want.
Every megabyte you add to your APK makes it harder for users to download and get started thats why Android Market will host the files to save you the pain and cost of file serving. Users will see the total size of your app and all of the downloads before they install or purchase it.
“On most newer devices, when users download your app from Android Market, the expansion files will be downloaded automatically, and the refund period won’t start until the expansion files are downloaded. On older devices, your app will download the expansion files the first time it runs, via a downloader library which we’ve provided below.”