Google’s Android Phones Challenge Apple iPhone For Smartphone Market Share

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At a media forum on Thursday, July 8, 2010, at the Allen & Co’s Sun Valley conference, Google executives Larry Page and Sergey Brin informed Journalists that Steve Jobs was re-writing Android’s history to align with Apple’s interests. They argued that contrary to Steve Jobs’s claims, Google worked on Android long before the iPhone was launched in 2007.

According to Mr. Page: “We had been working on Android for a very long time, with the notion of producing phones that are internet-enabled and have good browsers and all that because that did not exist in the marketplace. I think that the characterization of us as entering after the iPhone was introduced is not really reasonable. ” Google co-founder Larry Page opined that Mr. Jobs’s claim that Google went into the phone business to challenge Apple iPhone was false.


However, a review of smartphone history will show that Google acquired Android in 2005 and began making phone prototypes soon afterward. Informed sources say the Android phone model that Mr. Jobs saw at that time looked more like the Blackberry. This suggests that Google’s initial idea may not have been to make phones that look like the iPhone. Now the question most industry watchers are asking is if Google had been working on an Android-powered phone, why did they wait until September 2008, a year after the iPhone was launched, to introduce the G1 phone?

Also, the facts suggest that it was because of tensions over Google’s entry into the phone business that may contribute to Mr. Eric Schmidt’s exit from the Apple board. Analysts believe that Google may have been working on an android powered phone before the iPhone was introduced, but the iPhone seemed to have given them better insights into how to perfect their own smartphone. This is especially true given the resemblance of the Nexus One to the iPhone. Further confirmation of Google’s motive for launching the Android phones could be gleaned from comments they made at the Google I/O conference held last May. At the event, Google explained that they introduced Android to consumers so that Apple would not acquire enormous influence that could become draconian.

Besides, the facts seem to suggest that Google went into the phone business following the realization that the future of computing would be in portable devices like phones and tablet computers. As a result, they went into the phone business, intending to dominate web search on that platform just like they had done on the desktop. This notion is supported by Eric Schmidt, CEO of Google, in published comments, he made in an interview with the UK Guardian newspaper on June 25th, 2010. In that interview, Mr. Schmidt suggested that he wants Android to be the Windows of Mobile.


Also, in that same interview, Mr. Schmidt made critical comments about Microsoft Windows. He said: “You have to ask how on earth Windows Phone – which will have a paid-for license – is ever going to attract any handset makers, but it must be loudest for developers considering whether the shrinking, forwards-incompatible pool of Windows Mobile phones is really worth bothering with”. In contrast, Apple appears to have gone into the phone business as a re-positioning strategy and intending to make huge revenue from the sale of the smartphone hardware itself.

With the advent of smartphones, Apple realized that there was a huge potential in mobile advertising. This was why they sought to acquire Admob. While Apple was negotiating to buy Admob, a mobile advertising company, Google quickly stepped in and acquired Admob. As a result, Apple went ahead to earn Quatro wireless, which is Admob’s biggest competitor. In reaction to Google’s acquisition of Admob, Apple has re-written the rules of its mobile Advertising platform called the iAd, therefore shutting out Admob, which Google ad acquired ARTICLES :

As the smartphone war rages on Bloomberg, news reports that Apple has sold more than 50 million iPhones since its introduction. According to Apple CEO, Steve Jobs the latest version, iPhone 4, has sold more than 3 million units since its June 24, 2010 debut. Analysts believe iPhones account for nearly 35 percent of Apple’s $42. 9 billion revenue. Also, the iPhone has over 200 000 applications with over 5 billion downloads to date.

The rapid growth of applications on Apple’s ecosystem could be traced to developers’ initial incentive. For example, in the beginning, to encourage applications that will run on the iPhone, Apple made an indirect investment by a $100 million venture-capital fund set up by Kleiner Perkins Caufield & Byers. Today Apple has paid over one billion dollars to developers since its inception. Apple’s success has spurred other smartphone market players like HP, LG, RIM, Google, Palm, Nokia, and Microsoft to develop mobile stores where customers with mobile platforms can pay and download applications.

Like Apple, Google has achieved success with its Android-powered smartphones as sales have continued to rise dramatically. A confirmation of Android’s growth could be gleaned from the positive comments made by Google’s Senior VP of Product Management, Jonathan Rosenberg, in July 2010. According to Mr. Rosenberg, 160 000 Android-based devices are being activated daily. He stated that Android search grew by 300 percent in the first half of 2010, with strong growth expected to continue in the second half.

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Mr. Rosenberg added that overall revenue jumped by 24 percent year-on-year, and profit increased by 19 percent. Informed reports show that as of May 2010, there were 50 000 Android Apps, but today, they are over 70, 000 and by the end of the year, they should reach 100 000. Also, Google has tried to encourage developers of applications for the Android operating system through a contest. According to Andro Lib, Android users have downloaded more than one billion applications to date, according to data made available.

Interestingly, another measure of Google’s Android phone success could be seen from positive figures posted by HTC, the Taiwanese smartphone manufacturer, in the second quarter of 2010. In July 2010, the company announced that its net income rose by 33 percent for the second quarter, and total revenue was 58 percent more than last year’s figures. According to the Wall Street Journal, for the second quarter of 2010, HTC made a $268 million profit.

The rise in the profit of HTC is a reflection of the success of Google because analysts believe that it is Android phones that are driving the company’s growth. The wide acceptance of HTC’s Google Android-powered phones like Evo 4G, the Droid Incredible, the Google Nexus One, and T-Mobile-My Touch 3 help position HTC as a leading smartphone manufacturer.

A pointer to the rapid growth of Google’s Android could be discerned from the fact that Comscore reported on July 8, 2010, that Google’s Android platform grew by 44 percent from February to May. According to Comscore, in the three three-month time frame from December to February, Android had a mean market share of about 9 percent of the smartphones in the United States. However, from March to May, the Android market share grew to about 13 percent in the following three-month time frame.

Remarkably despite the increase in Android’s market share, the Comscore report showed that as of July 2010, RIM was number one with 41. 7 percent share of U. S. smartphone subscribers, followed by Apple with 24.4 percent share. Microsoft was 3rd with a 13.2 percent share; Google’s Android was 4th with 13 percent, and Palm was 5th with 4.8 percent market share. Market analysts say a review of the totality of the Market will suggest that Android is growing at a rate that will see it outpace all its competitors.

The Google -Apple face off in the smartphone market is turning out to be like Apple -Microsoft war of the ’80s and ’90s. In the Apple-Microsoft war of the 90’s Microsoft gained a competitive advantage over Apple because while Microsoft was forming partnerships with PC vendors, Apple kept its operating system closed for use in only its own computer systems. In that kind of arrangement, Microsoft Windows soared in market share while Apple stagnated.

In the present case, Google’s Android platform is growing rapidly because it is free, so many handset manufacturers are showing a preference for it. Also, and is available on multiple carriers like AT&T, Sprint, Verizon, and T-Mobile. However, the Apple iPhone Os runs only on a single device -the Apple iPhone and one carrier ATT. Experts believe if this trend continues, it may lead to slow growth for the iPhone.

Industry sources say it may only be fair to make comparisons between Apple iPhone and other smartphones running on Android on an individual basis to determine how well each one stacks up against the iPhone. Experts believe that collectively, smartphones running on Android may eventually have more market share than the Apple iPhone smartphone, a single device. Still, individually none of the Android phones would likely outsell the iPhone, which is regarded as the fastest-selling smartphone in history.

A pointer to the smartphone market’s future will look like is contained in the recent report published by IDC, a market intelligence company. According to IDC’s analysis by 2013, Symbian will be the number one mobile OS worldwide, while Android will be the No. 2. IDC predicts that Android may likely achieve the fastest growth of any mobile operating system ever.

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