After twelve months of rapid growth and steady adoption from smartphone manufacturers, Google Inc.‘s (NASDAQ: GOOG) Android operating system has overtaken Apple Inc.‘s (NASDAQ: AAPL) iOS and Research in Motion‘s (NASDAQ: RIMM) BlackBerry operating system. New data compiled by advertising research group the Nielsen Company shows that Google’s Android is the single most popular smartphone platform in the United States as of September 2010. Of individuals polled, 32% of respondents had who has purchased a smartphone between February and August 2010 bought an Android-based phone, while 26% had purchased a BlackBerry and just 25% had purchased on iPhone. In less than two years, Google has managed to become the most popular mobile platform around.
While Google’s success in penetrating a market that had been dominated by just two major players in the past, Apple and Research in Motion still have the largest installed base of actual smartphones. Nielsen found that despite major gains by Apple’s iPhone in the past two years, Research in Motion still has the largest number of smartphones out in the market, with 31% of market share. Both Google and Apple have taken away a significant portion of RIMM’s market share though. While RIMM fell from a 37% market share to 31% over the course of the year, Google has risen from an 8% market share to 19% over the same period. Apple’s share of the market has stayed relatively static, fluctuating by only 2% since January 2010. The Cupertino, California company currently controls a 27% market share of smartphone owners.
Based on 2010 trends and the outlook for new devices in 2011, investors can expect these shifts to be even more dramatic in another twelve months. Research in Motion’s latest smartphones like the BlackBerry 6 OS flagship, the BlackBerry Torch, have failed to create any significant consumer buzz so its likely that they will lose their dominance of the actual smartphone market by the end of the fiscal year in March. Apple’s control of the market depends on how soon they will announce new partnerships with mobile carriers other than AT&T (NYSE: T). If the company announces a Verizon (NYSE: VZ) iPhone or T-Mobile (EDR: DTE) iPhone in the first quarter of calendar 2011, there will be massive upswing in iPhone sales giving them an advantage over both Google and RIMM in actual smartphone install base and OS preference. With new Apple handhelds not guaranteed though, Google and its partners like Motorola (NYSE: MOT) will find their recent growth unimpeded by major competitors. Google, Verizon, and Motorola shareholders should be thrilled; it’s very possible that Google will control the smartphone market by mid-2011.
The wild card in this scenario is Microsoft‘s (NASDAQ: MSFT) Windows Phone 7 operating system. With devices from Samsung, HTC, and LG shipping at the beginning of November, Microsoft finally has a chance to win back some of the smartphone market that they helped create last decade. Chances are the platform won’t be making a significant impact this fall or next spring though. Microsoft will be hampered by their exclusivity with AT&T, as users who choose the carrier will likely opt for the more popular and known Apple iPhone. This could change next year when multiple carriers begin supporting Windows Phone 7 smartphones, but as of now, it’s Google’s market to win.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
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