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Google (s goog) overhauled its Android Market earlier this month, but appears to have held back one key enhancement that could help boost mobile app sales: demo videos of applications within the Android Market. Google either hasn’t mentioned this feature or I missed the news, but AppsFire, a third-party portal to help discover and install Android software, has just added the video demos to its latest software version. According to the AppsFire blog, Google recently made the API changes necessary to tap into these video demonstrations, meaning other third-parties could leverage the software demonstrations as well.

Developers who upload videos to show off their Android apps to potential customers should provide a far more compelling sales experience than the few screenshots allowed today. While it’s nice to see app images, adding video to an application’s description can enhance the experience, especially for software with complex functionality and features. Strangely, Google didn’t mention the new video feature when announcing the Android Market updates on Dec. 10, but now that an API is available and developers are uploading videos, I anticipate Google will roll this out.

In an email exchange, Ouriel Ohayon, a co-founder of AppsFire, pointed out that approximately 500 apps in the Market have a demo video, and it’s likely many more will follow. After updating my Galaxy Tab to the newest version of AppsFire, I quickly found a video demo of Dropbox. It’s one of my favorite apps, but when I explain what it does, some folks have a hard time understanding the concept. No, not everyone is familiar with cloud storage and synchronization, but a picture is worth a thousand words, and the video demo explains Dropbox better than I can.

Google is leveraging YouTube for this demo-video effort: a wise move. I still think it’s too difficult to find good apps in the Market, which is why I’m using AppsFire, but once you find them, the videos will help customers understand what they’re buying before they make a purchase.

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