Mobile Sales Keep Rising as Apple & Android Vie for Lead

Android, the operating system for mobile devices developed by Google and made available to third-party hardware makers, has increased its share of the smartphone market, according to a Nielsen Mobile Insights survey. A separate report by tech research firm Gartner, however, showed that Android's share of the tablet market, where it competes with Apple's iPad, has failed to grow significantly, despite the introduction of several Android tablets in the last year.

The Nielsen survey found 43% of smartphone owners in the US now have Android devices, compared with 28% who have an iPhone. More significantly, of those who had bought a smartphone in the last three months, 56% had chosen an Android device while 28% had purchased an iPhone. Those figures suggest Android's share of the market is increasing, while the iPhone's is stable.

On the other hand, Android represents a variety of hardware makers, iPhone only one. The iPhone remains the world's favorite smart phone. And with the iPhone 4 getting long in the tooth during the period reflected, having been on sale for more than a year and with a new model anticipated for months, the figures represented a low water mark for sales, which will be expected to spike dramatically after the introduction of the 4S.

What's good news for all vendors is that the smartphone market as a whole is growing quickly, according to Nielsen. While 12 months ago only 27% of mobile phone owners in the US had a smartphone, that's risen to 43%. Moreover, of the people surveyed who had bought any kind of mobile phone in the last three months, 56% had picked a smartphone. 'The holiday season and the launch of new devices like the next iPhone could further accelerate smartphone adoption,' said Don Kellog, Nielsen's director of telecom research and insights.

During the launch of the iPhone 4S, Apple CEO Tim Cook mentioned that the iPhone still accounted for only 5% of all mobile phones and the relative growth of smartphones presented an 'opportunity'.

Android's success in smartphones has not been mirrored in tablets. Research firm Gartner recently downgraded its expectation for Android's share to 17.3%, an increase of only 4% on 2010, compared with the iPad's 73.4%. 'We expect Apple to maintain a market share lead throughout our forecast period by commanding more than 50% of the market until 2014,' said Carolina Milanesi, research vice-president at Gartner. Based on Apple's previous launch cycles, two new iPad models are likely to be announced during that time.

As we reported last issue, Google and Intel have announced a partnership to optimize all future releases of Android for Intel processors. Chips from ARM are currently more widely used in mobile devices, including Apple's. The Intel tie-up could help to increase the range of Android-based devices, but the next few months will be a crucial test of whether Google's inroads into the smartphone market against Apple can be maintained.

Meanwhile, the most credible rival to the iPad could be Amazon's new Kindle Fire, an ARM-based tablet with relatively modest specifications. Based on Amazon's own adaptation of Android, it has a strong brand behind it - but at $199, even strong sales might not challenge the profitability of Apple's tablet.

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