Google's Android Takes Bite Out Of Apple

U.S. consumers are coming around to the Android operating systems for their smartphones, with the system moving past Apple to take the No. 2 position behind category leader RIM during the first quarter of 2010.

According to the market research company, 26% of the smartphones sold during the time period were Android-operated phones, behind RIM's operating system (OS) (which accounted for 36%), but ahead of Apple (21%). While at first blush, that may look like bad news for Apple, it really was just a matter of time before Android overtook that brand, says Ross Rubin, executive director of industry analysis at NPD.

"It's a numbers game," Rubin tells Marketing Daily. "If your OS has the right partners and the right carrier support, you can ride the backs of [them]."

Thanks to the large variety of OS offerings (and exclusivity with the iPhone), AT&T led among carriers when it comes to smartphone sales, with nearly a third 32% of the sales coming from AT&T. Bolstered by "buy one, get one" offers on all smartphones, Verizon was a close second, accounting for 30% of sales, while T-Mobile and Sprint lagged behind (17% and 15%, respectively), according to NPD's Mobile Phone Track survey.



While Apple doesn't allow its operating system to run on third-party handsets and has exclusive contracts with AT&T, the company still gains value from tight integration with the hardware. And it doesn't have to worry about people opting for the latest-and-greatest ideas coming out of other makers.

"There's value to be gained from integrating more tightly with the hardware," Rubin says. "As more and more handsets come out, they will begin to cannibalize the older Android handsets ... Indeed, AT&T offers more smartphone OS choices than any other carrier, but the iPhone is still its dominant [phone]."

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