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Assuming I purchased and downloaded a few apps, via the existing primary account from the Android Market:

If I do factory reset, then set a different primary gmail account, will I lose all the apps I already downloaded?

If not, what is really being erased when a factory reset is done?

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Yes, you will "lose" those apps, since they are tied to the Google account rather than to the device. As far as I know, there is no way to transfer a purchased app from one account to another.

A factory reset basically clears the /data partition.

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Thanks. And if I set back the original primary gmail account after I do (one or more) factory resets, will be able to gain back the apps I purchased? BTW, I looked at the data folder in File Manager and it is empty, despite the fact that I didn't do factory reset yet (and all my apps are in the phone). –  Bill The Ape Jan 6 '12 at 14:11
3  
@BillTheApe (As long as your device has Android 2 or newer) then you can add more than one Google account to your device. Once you have more than one the Market app has an "Accounts" menu option that lets you switch between your accounts, so you can temporarily switch the Market to your old account and download all the apps purchased on that account again. –  GAThrawn Jan 6 '12 at 14:17
    
@GAThrawn This is a very helpful tip. Thank you! I wish I could have given you +10 (not enough points in my android.stackexchange account). –  Bill The Ape Jan 6 '12 at 14:30

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