Google beats Microsoft in smartphones, catching Apple

PARIS Wed May 19, 2010 11:37am EDT

A model demonstrates a Nexus One smartphone after a news conference at Google headquarters in Mountain View, California in this January 5, 2010 file photo. REUTERS/Robert Galbraith

A model demonstrates a Nexus One smartphone after a news conference at Google headquarters in Mountain View, California in this January 5, 2010 file photo.

Credit: Reuters/Robert Galbraith

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PARIS (Reuters) - Google has overtaken Microsoft in the battle over the software that runs mobile phones and is challenging Apple for share of the fast growing smartphone market.

Google's Android was the fourth most popular operating system on smartphones sold in the first quarter, research firm Gartner said on Wednesday, putting the company in a good position as handsets look set to surpass computers for browsing the Web.

Android, which was in 10 percent of smartphones sold in the quarter, still lags Nokia's Symbian, Blackberry-maker Research in Motion and Apple.

But Gartner said Android phones were already outselling the iPhone in North America, less than two years after the Internet search giant entered the market.

"Android will sail smoothly. Until next year it will likely be a battle between Apple and Android," Jee Dong-seob, a senior official at SK Telecom, told Reuters Global Technology Summit in Seoul.

DEVELOPER BOOM FOR ANDROID

More and more start-ups are developing applications for Android, boosting interest among consumers and posing increasing risk to Apple, venture capitalists told the Reuters Summit in San Francisco.

While Apple's app store offers more than 200,000 games, tools and other software to jazz up the iPhone, against just 38,000 for Android, the openness of Google's mobile operating system is helping it gain popularity with developers.

"I am quite impressed by the traction the Android ecosystem is getting," said Redpoint Ventures' partner Chris Moore.

"I want to say that on the current trajectory, they (Android) will pass the iPhone platform, or at least reach parity by the end of this year or middle of next year."

App developers usually choose a limited number of mobile platforms to write software for as every additional platform sharply raises their costs.

CROWDED MARKETPLACE

Nine major operating systems have either launched or are in development. Some players in the industry expect to see further consolidation, while others say fragmentation is set to continue.

"Markets will continue to remain fragmented and competition will only get tougher as players will push hard to develop new systems or upgrade existing ones to offer customized products for mobile carriers," Lee Ho-soo, head of Samsung's bada smartphone operating system, told the summit in South Korea.

Morgan Gillis, chief of mobile operating system LiMo, told the summit in Paris he expected to see more consolidation following Nokia's and Intel's merger of their Linux-based operating systems.

"I think that the eventual number of industry device operating systems will be no more than five, probably four," Gillis said.

MICROSOFT CHALLENGED

Microsoft, which has been making mobile software for around 10 years, said it was committed to wireless, and hopes to claw back market share it has lost to rivals with new Windows Phone 7 models, due to reach markets in time for holiday sales at the end of the year.

"We are very committed, it's a core part of our strategy," Microsoft CFO Peter Klein told Reuters Summit in New York.

Handset makers such as HTC and Samsung make Windows phones but are increasingly turning to Android, which is not only free but attracting a fast-growing developer community.

(Additional reporting Alexei Oreskovic in San Francisco, Sinead Carew in New York, Miyoung Kim and Soeui Rhee in Seoul, Harro ten Wolde in Paris; Editing by David Cowell)

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