Can Android Grow From Micro-Machine to Iron Giant?

Worldwide sales of Android-based smartphones are expected to grow 900percent by year’s end, according to a report from research firm StrategyAnalytics.

Meanwhile, the Apple iPhone should continue to see strong sales butremain the second fastest-growing handheld platform. Research In Motion’s BlackBerry is notexpected to lose its footing, standing firm as the second most-popular smartphone operating system (OS) in the U.S. last year, according to thereport.

The Android OS is currently available in just one smartphone in the U.S. (the T-Mobile G1, manufactured by HTC), but many other device makers are rumored to have Android products in the works. The OS may also appear in small netbook computers soon.

Given its relatively limited implementation now, it’s a safe bet that Android has room to grow, Jim McGregor, chief technology strategist forIn-Stat, told LinuxInsider. “But still, that is a high number,” he said.

Clear Signs

Strategy Analytics‘ prediction for Android’s rapid rise in smartphonesales this year is based largely on vendors’ actions as they prepare tohit the marketplace. Though the year began with just one Android phone stateside, 2009 will end with Android-powered phones from Samsung, Sony and Motorola, according to Alex Spector, an analyst for Strategy Analytics. Vendors will make announcements about their new phones soon, he said.

“No actual sales this year show a buying trend. Most of the growth isstill expected for the second half of the year,” Spector toldLinuxInsider.

Samsung is expected to announce its new I7500 smartphone for Europe in June. The company could follow up with an announcement for the same phone inthe U.S. in the fourth quarter, Spector said.

Strategy Analytics expects the smartphone market to expand by 10 to 20percent this year from 152 million handsets sold last year. Nearlyhalf of all smartphones use the Symbian operating system, Spector said. Research In Motion sales topped 23.5 million, and about 20 million phones with Microsoft’s Windows Mobile OS were sold. Apple moved 13.7 million iPhones.

The Android platform grabbed initial attention in the U.S. marketduring the second half of last year. Similarly, this year it is gaininga footing in European and Asian markets, according to Strategy Analytics.

Growth Factors

“Part of the potential for Android’s expected growth is its appeal asa competitor for Apple’s proprietary OS,” Spector said. “Vendors arelooking for a comparable solution.”

Another reason for Android’s expected growth is itspotential to counter the iPhone’s advantage in applications. Apple popularized the idea of selling applications through a central online store about a year ago. The Android platform also includes an application marketplace, and other platforms have begun following suit as well. Google, which developed the Android OS, has the potentialto attract application developers for Android-powered devices, Spectorsaid.

Potential Appeal

Even though Android is a relatively new platform that may need to mature further, its open source roots give it the potential to leverage a huge installer base, Spector explained.

Vendors are showing a lot of interest in Android as a Linux solution,agreed McGregor, and Google has the resources for Android to grab a tighter holdin the market.

“This is the year we will see a lot of devices trying out Android,” he said.

The Linux Factor

Market research firm Gartner is taking a more cautious view regarding Android.

“Our view is that Android shipments will remain modest in 2009 as newdevices based on this platform will only be available at end of the yearfrom some key handset vendors like Samsung,” Roberta Cozza, principalanalyst for Gartner, told LinuxInsider.

Gartner’s forecast currently sees Android devices accounting for 30percent of the total Linux handset market — that’s less than 5 millionAndroid smartphones sold in 2009.

“This is a 630 percent increase in Android sales in 2008, according toour estimates. I don’t think, though, that any year-over-yearcomparison is that meaningful here, as the base in 2008 is so low withthe first Android phone, the G1, which started selling only in [the] fourthquarter of 2008,” she said.

Android is developing fast, but it’s not matureenough despite each update bringing in key improvements, according to Cozza. Google’sresources and the stature of the members of theOpen Handset Alliance position Android as astrong candidate to develop more consistent and standardized Linuxsmartphones that can ultimately gain critical mass.

“We expect Android to have less of an impact in EMEA, where Symbianenjoys a dominant position. In other regions — like North America,where a lower-cost consumer mobile OS has been missing — the Androidplatform could fill the void and be well received by carriers,”Cozza concluded.

Vendor Obstacles

It’s easy to throw around growth figures like 900 percent when a vendor has littlemarket share to begin with, argued Mark Asnes, COO of The Wireless Zone.

“The fact is that it will be hard for any new OS to break into themarketplace. Apple did it because of the uniqueness of itsapplications and the phone itself. The equipment was just as importantas the OS,” Asnes told LinuxInsider.

Running an OS on any phone that a manufacturer wants to run it oncan reduce its draw, and if an OS fails to woo wireless carriers, itdoes not matter what the manufacturers want to do, he said.

Apple’s monolithic brand recognition and its largebase of loyal customers helped push the iPhone along. In fact, Asnes said, two companies currently dominate the smartphone market in the U.S.: Apple and RIM. The customer bases for those vendors are locked into their respectiveplatforms, he said.

In regard to Android, “It’s much too early to tell how the consumer or manufacturers will make the transition when the only phone operating is on the fourth-largest carrier,” said Asnes, referring to T-Mobile.

In the past, business users have been the main drivers for smartphones, but today the consumer is in charge, he noted.

“The ability to do email on non-business platforms like Yahoo isattracting the next generation of users,” Asnes observed. “Add to it the ability to dosocial networking, and now youth is the fastest-growing segment.”

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