10 Billion Reasons to Like Android
You aren't being paranoid. You really are surrounded by Androids.
Google's (GOOG) mobile operating system is a hit on smartphones and to a lesser extent tablets. Google recently announced that there were 200 million activated Android gadgets in the wild, matching Apple's (AAPL) iOS grip on iPhones, iPads, and iPod touch devices. This month the world's leading search engine had an even bigger number to feed us: 10 billion Android apps have been downloaded.
There are now a billion Android apps downloaded a month, matching Apple's App Store activity.
In a battle between Google and Apple, there's no doubt that Apple's the one making the serious money here. Apple's marking up its hardware to command healthy profit margins and it collects a good chunk of its App Store revenue before paying participating developers.
Google's Android, on the other hand, is open-source. Any handset or tablet manufacturer can put out an Android device without having to pay Big G a single penny. Application marketplaces are more open.
It's this compelling value proposition that finds manufacturers flocking to Android. They don't have access to the proprietary Apple or Research In Motion (RIMM) platforms. They are in no hurry to pay Microsoft (MSFT) for an operating system that hasn't taken off outside of actual PCs.
The Androids Are Gaining Ground
Apple sold 17.1 million iPhones in its latest quarter. It's a number that the company will easily surpass this quarter. It's the holidays. The iPhone 4S also didn't roll out until after the tech giant's fiscal quarter came to a close. Analysts are targeting roughly 30 million iPhones will be sold this quarter.
If you think that's impressive, check out Android. Sales tracker Gartner estimates that 60.5 million Android handsets hit the market last quarter. Things will obviously get even better this holiday shopping season.
Android has been gaining market share at Apple's expense over the past few quarters. Android phones have gone from 25.3% of all smartphone sales a year ago to 52.5% now, according to Gartner. The iPhone in that time has shrunk from 16.6% to 15%.
The market share numbers will be kinder to Apple once we can tally up the current quarter. The iPhone 4S is a hit with its Siri speech recognition feature, and Apple is also addressing the need for smartphones at lower price points by keeping older models rolling out at subsidized prices that border on free with two-year contracts.
However, Android will continue to be the smartphone platform of choice in the near term -- and that's coming from someone who is a satisfied iPhone owner.
Don't Forget About Mr. Softy
Things will get even more interesting next year. Microsoft has a lot of ground to make up, but the buzz is already building for Windows Phone and Windows 8. As the software behemoth's first operating system designed to work with both PCs and touchscreen tablets, Windows 8, when it rolls out next year, may finally make Microsoft a force in the tablet market.
Microsoft's deal earlier this year to get handset leader Nokia (NOK) to champion Microsoft's updated mobile operating system should also begin to pay off.
Is there room in the smartphone and tablet space for three well-financed titans? We'll find out soon enough, but for now Google's Android is the one that deserves respect and applause.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Microsoft, Google, and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Microsoft, and Google. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft as well as in Apple.