Does Europe Hate the iPhone?

We're loving Apple's (NAS: AAPL) shiny new iPhone here, but it's a different story throughout continental Europe.

A study by Kantar Worldpanel ComTech shows that sizable market share gains in the United States, Australia, and the UK since the iPhone 4S debut are being partly offset by significant declines in Germany, France, Italy, and Spain.

The iPhone's market share in France for the 12 weeks through the end of November slipped to 20%, compared to a 29% slice a year earlier. Apple's iconic handset's market share in Europe has slipped from 27% to 22% over the past year.

When IT research firm Gartner published global smartphone sales metrics for the third quarter, it was easy to take Apple's share of the handset market slipping to 15% from 16.6% a year earlier with a grain of salt. The iPhone 4S was delayed from Apple's historical summertime release. Who cares if Google's (NAS: GOOG) Android saw its market share more than double to 52.5% in that time? Things would change when the new iPhone hit the market.

Well, the iPhone 4S is out, and Android is still the top dog. Google's operating system is cornering between 46% and 61% of the market in individual markets according to Kantar's research. Even in the U.S. and UK -- where the iPhone 4S has helped Apple nab roughly a third of all smartphone sales -- Android is still the operating system of choice.

Apple bulls will argue that it doesn't matter. Who needs Europe and its sovereign debt crisis? Android is a profitless open source initiative. Apple is the one with the lion's share of the market's profitability. However, Android's success is coming at an expense to Apple.

There are now more Android devices being activated than iOS gadgetry on any given day, drawing developers to Google's less restrictive app marketplace. Wireless carriers are embracing Android-fueled handsets that they don't have to break the bank to subsidize the way that they do with the costly iPhone.

Even in China, where Apple's growth is booming among the well-to-do, things are about to get interesting now that search engine leader Baidu (NAS: BIDU) has teamed up with Dell (NAS: DELL) for its own modified Android smartphone.

It's safe for Apple to write off Research In Motion (NAS: RIMM) as a threat, but don't dismiss Microsoft (NAS: MSFT) now that it's forking over billions to have Nokia (NYS: NOK) -- the world's largest handset maker -- champion its Windows Phone 7 cause.

There's a big world out there for Apple, but it can't afford to shrink in key markets.

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At the time thisarticle was published Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.The Motley Fool owns shares of Apple, Microsoft, and Google.Motley Fool newsletter serviceshave recommended buying shares of Google, Microsoft, Apple, Baidu, and Dell.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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