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Google's Android Gaining on Apple via Developers

June 23, 2010, 2:50 PM EDT

(Adds Motorola unveils new phone in 12th paragraph.)

June 23 (Bloomberg) — Google inc.’s Android mobile operating system is winning over an important group of allies in its fledgling rivalry with Apple inc.’s smartphone software: application developers.

more than half the 2,733 developers surveyed by Appcelerator, a mobile-software tools provider, see Android as having the most long-term potential among operating systems. About 40 percent of respondents said Apple’s iOS would have the best long-term outlook, according to the survey released today.

The study yields another signal that Android is gaining steam on iOS, which will power the new iPhone 4, Bloomberg Businessweek.com reported. With some 60 Android-based devices and more than 60,000 apps available, the operating system is adding more than 100,000 users daily, according to Mountain View, California-based Google. Android will eclipse iOS as the world’s second-most-popular mobile operating software in 2012, researcher Gartner inc. has said.

“Google and Apple are playing a chess game, and everyone else is playing catch-up,” said Scott Schwarzhoff, vice president of marketing at Appcelerator, also in Mountain View.

It’s not just in phones where Android may challenge Apple and other smartphone software makers, including Microsoft Corp., Research in Motion ltd., Palm inc. and Symbian, the world’s most popular mobile-operating system. Dozens of manufacturers such as Sony Corp., Logitech International SA and Toshiba Corp. are readying tablet computers, netbooks, set-top boxes, e-readers and televisions that will run on Android.

Deja Vu

“Android is the only viable alternative to Apple right now,” said Ken Dulaney, a vice president at Gartner in San Jose, California.

Steve Dowling, a spokesman for Cupertino, California-based Apple, declined to comment.

The competition for connected electronics resembles the battle that played out between Apple and Microsoft in the 1980s and early ‘90s, when the personal-computer operating-system market was still up for grabs.

“Now you get the Microsoft-Apple war in PCs on the mobile devices,” said David Owens, vice president of marketing at Sprint Nextel Corp., the third-largest U.S. wireless provider, which has introduced three Android-based smartphones since late last year. The latest, HTC Corp.’s Evo 4G, released this month, had the best first-day sales of any device at Sprint.

Market Share

Robust Android sales boosted HTC’s U.S. smartphone share to 9.4 percent in the first quarter from 7.3 percent in the third period of 2009, according to preliminary data from researcher IDC in Framingham, Massachusetts. Motorola inc., maker of the Droid, saw its share jump to 12.4 percent from 2.1 percent.

“They feel this is something that, moving forward, is really going to help them,” said will Stofega, program director at IDC.

Motorola, based in Schaumburg, Illinois, unveiled a new Android handset today, the Droid X, with an 8-megapixel camera and a faster processor.

Suwon, South Korea-based Samsung Electronics Co. is “putting a lot of investment” behind its Galaxy S phone debut in the U.S. through AT&T inc., said Justin Denison, vice president of strategy for Samsung Telecommunications America. he called the device the company’s “most important product in the premium smartphones category this year.”

‘Robust’ Portfolio

Carriers including AT&T, the iPhone’s exclusive U.S. service provider, are hungry for Android. Since offering its first Android handset in March, AT&T released HTC’s Aria in June and said it will soon offer Samsung Captivate.

“We are planning a robust Android portfolio,” AT&T spokeswoman Dawn Benton said.

Verizon Wireless has run big promotions for Motorola’s Droid.

Eventually, “we are going to do as well as if we had the iPhone” as the company expands its Android portfolio, Verizon Communications inc. Chief Financial Officer John Killian said at a technology conference last month.

Google fell $3.38 to $482.87 at 2:46 p.m. new York time in Nasdaq Stock Market trading. The stock had dropped 22 percent this year before today.

Well-Known Name

Google’s support and well-known brand is part of the reason behind Android’s surging popularity among consumers. “People know Android is from Google,” said Sprint’s Owens. “That market knowledge has translated into consumer interest.”

Competitive pricing has also helped. in the past six months, Verizon Wireless offered two Droid phones for the price of one. It currently sells HTC’s Droid Eris for $50 with a two- year contract. The cheapest iPhone retails for $99. The new iPhone 4 will be released on June 24, starting at $199.

Phone makers are working on developing even cheaper Android smartphones to take share from so-called quick-messaging devices, whose use has exploded in recent years, Gartner’s Dulaney said. such “junior smartphones” — with less memory and lower-resolution screens — should become available in late 2010, he said.

many of Android’s early bugs are getting worked out and the software offers more features.

“They’ve learned from those mistakes,” IDC’s Stofega said. “Android is now mature.”

–Editors: Lisa Wolfson, Peter Elstrom

To contact the reporter on this story: Olga Kharif in Portland, Oregon, at okharif@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net; Thomas Giles at tgiles5@bloomberg.net

Google's Android Gaining on Apple via Developers


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