Google's Android Jumped Past iPhone in First Quarter
In the heated battle for smartphone supremacy, Google's (GOOG) Android jumped past Apple's (AAPL) iPhone in the first quarter, grabbing the No. 2 spot for smartphone operating systems and pushing its rival to third, according to a market research report released Monday by NPD Group.
Android grabbed 28% of the smartphone operating system market share, edging out Apple's iPhone, which garnered 21%. Research in Motion's (RIMM) operating system for its BlackBerry devices, meanwhile, continued to hold the lead with its 36% market share.
"Carrier distribution plays a crucial role in determining success, but it's not the only formula for success," says Ross Rubin, NPD's executive director of industry analysis.
AT&T (T) is the only domestic carrier to offer the iPhone, while Android-based smartphones are widely distributed through a number of carriers such as Verizon, Sprint (S) and T-Mobile. And, like Google's Android, Palm's (PALM) webOS and Microsoft's (MSFT) Windows Mobile are also distributed by more than one carrier, but for years they've struggled to gain traction.
In just 20 months, however, Google has seen its market share skyrocket since it launching the Android software. "At the end of the fourth quarter, [Google and Apple] were in a dead-heat, so it was clear that Android was gaining share," Rubin says.
Nexus One: Still Not So Hot
He notes that an expanded Verizon (VZ) buy-one-get-one-free program helped propel sales of Android-based phones. Android took first-quarter market share from Windows Mobile and other players, while RIM lost one percentage point and Apple retained its existing slice of the market, compared with the previous quarter.
Despite Android's quick traction, Google's efforts to spread consumer love to its own recently launched Nexus One phone is apparently a tougher sell. That Android-based phone was panned within a week after its launch.
Nonetheless, one analyst expects Android to reduce Apple's historical iPhone growth rate of 80% to 100% annually down to 25% to 30% in the near future.
These predictions and its recent fall to the No. 3 spot aren't likely to spur Apple to break from its exclusive AT&T contract any sooner than it had planned, says Rubin, who notes that Apple tends not to let market share play a big role it in its decision-making. That may not sit well with Verizon and its customers, who continue to pine for access to an iPhone.