• by Mark Walsh  @markfwal, June 18, 2010

In another sign that Android is making inroads on the iPhone, Apple's share of impressions on Millennial Media's mobile ad network dropped 10 percentage points from April to May.

While Apple remains the top handset maker on the ad network, with a 25% share of impressions, manufacturers of Android-based phones such as HTC and Motorola are gaining ground. HTC, for instance, increased its share month-over-month from 6% to nearly 8.5% while Motorola inched up from 5.5% to 6%, according to Millennial's new metrics report.

Looking at market share based on individual smartphones, the iPhone was the top device with an 18% share in May, but that was down from 25% the prior month. The iPhone operating system, now known as iOS, also lost share to Android last month. Apple's iOS dropped 14 percentage points to 48% even as Android gained five percentage points to reach 15% share, third behind iOS and the BlackBerry OS, at 19%.

The bottom line is that Android's growing presences on smartphones and in mobile Web use helps better position Google to grab a bigger slice of mobile ad dollars. When it comes to mobile applications, Millennial found that more than half of developers (56%) were focused on creating programs for Apple devices compared to 29% for Android.

It should be interesting to watch if that figure also creeps up for Android in the coming months, though, with Apple preparing to launch its iAd platform next month for running ads in apps. The Federal Trade Commission is reportedly investigating Apple for adding a provision to its developer agreement that appears to effectively block Google's AdMob network from serving ads on Apple devices.

In its latest report, Millennial also examined the app market overall. Gaming, not surprisingly, ranked as the most popular category, accounting for 58% of app revenue on the company's network. Gaming was followed by social networking, weather, entertainment and news and current events.

A bright spot for Apple, despite its shrinking smartphone market share, is the iPad. Ad requests on the much-hyped tablet device launched April 3 more increased 160% during May, according to Millennial. Much of that increase, presumably, has to do with growing sales of the iPad. Apple has said more than two million units were sold in the first two months of its release.