Android pushes iPhone into US third place

Despite the increasingly fragmented nature of the mobile operating system market, most of the new challengers are in their infancy, and even Symbian^3 will not appear in devices until later this year. This gives Android a welcome grace period to consolidate its position and steal share from other platforms, and it is clearly taking advantage, outselling the iPhone for the first time in Apple's heartland market, the US.
 
Although still lagging behind the other major US smartphone system, BlackBerry, the Google OS made strong strides there too. But in a market where Symbian hardly figures, webOS is in limbo, and Microsoft is readying a new platform, iPhone OS is the one to beat. According to figures from researchers at NPD, Android-based handsets accounted for 28% of smartphone shipments in the US in the first quarter, behind RIM on 36% but well ahead of Apple on 21%.
 
Of course, a new iPhone is expected to be unveiled next month, and this could boost Apple sales again, but the days of unquestioned US dominance by RIM and Apple are clearly over. This is partly because of the peculiar carrier politics of north America.
 
With AT&T hanging onto the only major iPhone exclusive, it has put huge efforts into making the Apple handset a success - but as its market share rises, these are having diminishing returns. And conversely, Verizon Wireless has woken from a long hibernation with regards to smartphones and come out fighting against the AT&T iPhone at last, extending its traditional RIM dominance with a strong Android strategy.
 
Verizon's marketing activities during Q1 are given the greatest credit for Android's significant leap forward. The carrier offers the Motorola Droid and HTC Droid Eris as its Android flagships, plus a range of BlackBerry models. This quarter, it will launch the high end HTC Incredible, and gain a strong response to any new iPhone - assuming it does not get one of its own, if Apple breaks the AT&T exclusive at last.
 
Many opinion influencers in the US market, including some previous iPhone lovers, believe the Incredible is the breakthrough device - with its high end specifications, HTC Sense user interface and Verizon marketing - to cure 'iPhone envy' and switch the lust of many consumers towards Android.
 
 
Not that Android's progress has been all about the high ground of superior hardware features, and a user experience and apps store that is catching up with Apple's. It also owed much to that old standby, aggressive carrier subsidy. Ross Rubin, executive director of industry analysis for NPD, commented: "In order to compete with the iPhone, Verizon Wireless has expanded its buy-one-get-one offer beyond RIM devices to now include all of their smartphones."
 
And Android still has a way to go in terms of total installed base, which is important to add-on revenues from software and services. According to another research firm, ComScore, it now accounts for 10% of mobile device ownership in the US. And the pattern is different outside the US, partly, of course, because of the power of Nokia and Symbian, with their 40% global share, but also because Android's progress is somewhat slower outside north America.
 
The key drivers of Android sales in the US, Motorola and HTC, have been far less aggressive in other markets, though HTC has unleashed a significant marketing campaign in Europe which is starting to bear impressive fruit - in key markets like the UK, the new Desire (similarly spec'd to the Incredible) was the bestselling smartphone in its launch weeks.
 
In global terms, new figures from IDC show the iPhone gaining market share, achieving 16.1% of the smartphone segment, up impressively from 10.9% a year earlier. Some of this was stolen from RIM - which saw its share dip from 20.9% to 19.4% - but more came from the ageing operating systems, Symbian and Windows Mobile, as both wait for their new generations.
 
Despite the OS hiatus period, Nokia kept its smartphone share steady at 39.3%, but other Symbian models from Sony Ericsson, Samsung and others were under pressure. Motorola had 4.2%, up from 3.4%, said IDC, in a smartphone sector that enjoyed overall growth of almost 57%, year-on-year, in 1Q10. The total handset market grew by 22%.
 
This article originally appeared on Rethink Wireless

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