Who's Winning the Smartphone Platform Wars?
The mobile industry has become a battleground for smartphone dominance. With roughly 42% of all U.S. mobile customers now using smartphones, finding ways to provide more advanced computing power and connectivity is a must for leading platform operators such as Google (NAS: GOOG) Android and Apple (NAS: AAPL) iOS.
Google closed out 2011 with nearly half of the U.S. smartphone market, while Apple racked up 30% market share for the year. Android surged to the top largely thanks to price advantages -- the Android phone being more of a mass-market product and iOS a premium product. While the Android operating system currently leads in global market share, Apple's App Store remains the leading ecosystem in terms of revenue, as well as the number and popularity of apps offered.
That's important, because in this industry competitive pricing and performance are no longer enough. Today, the leading platforms are those with the strongest ecosystems of apps, developers, and content providers. That could explain Google's recent decision to rebrand its Android Market, which will now be known as "Google Play." In an attempt to mimic Apple's popular iTunes and others in the space, Google Play will be a one-stop-shop for accessing digital entertainment on Android-powered devices.
I'm not sure this is enough to bounce iTunes from the top spot. However, a more integrated Android platform is likely to widen the gap between Apple and Google's systems and other smartphone platforms, including Microsoft's (NAS: MSFT) Windows Phone and Research In Motion's (NAS: RIMM) BlackBerry OS.
According to comScore, Microsoft's U.S. smartphone market share dropped to a new low of just 4.4% in January 2012. BlackBerry also lost smartphone subscribers this year, with its share falling from 17.2% in October of last year down to 15.2% in January. But don't write Windows off just yet. The Windows Phone should claim more of the mid-market and low-end range as Nokia transitions its phones from the Symbian platform over to the Windows operating system. Don't believe me? Nokia said it sold 1 million Windows Phone devices in the fourth quarter last year, and while that hardly competes with the 17.1 million iPhone's Apple sold, it is a note of progress for both Nokia and Microsoft.
Apple and Google are the clear winners here, as they're able to take advantage of network effects that their respective ecosystems have created. For example, as an iPhone user you're loyal to that platform because all of your apps and downloaded content are on iTunes. These types of advantages put Apple and Google in a league of their own. And this is only the beginning of the smartphone market boom. You can discover "3 Hidden Winners of the iPhone, iPad, and Android Revolution" today, in this free report from The Motley Fool's leading analysts. Get a look at the free report and learn how you can capitalize on this technology revolution.
At the time this article was published Fool contributor Tamara Rutter owns shares of Apple and Nokia. Follow her onTwitter, where she uses the handle@TamaraRutter, for more Foolish news and updates. The Motley Fool owns shares of Apple, Microsoft, and Google.Motley Fool newsletter serviceshave recommended buying shares of Google, Apple, Nokia, and Microsoft and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't 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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