Android Set to Outpace iPhone -- Eventually

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Mobile phones using the Android operating system will eventually be huge, even if the number of Android smartphones shipped in 2009 doesn't grow by 900% as a research firm recently predicted.

At some point, Android phones will outpace the iPhone, which has already shipped more than 21 million units since first appearing in June 2007, said analysts from Strategy Analytics of Newton, Mass. When this will happen is unknown, although it certainly won't happen this year or even in 2011.

The 900% Android growth, predicted in a recent report by Tom Kang, an analyst at Strategy Analytics, is based on Android's introduction in 2008 in the U.S., and also how fast it is spreading into Europe and Asia this year.

Android will expand from a low base, which partly accounts for the 900% figure, but underlying factors such as the fact the Android is open source and that it has the support of many smartphone device makers and carriers, put it in a good position for growth, Strategy said. It also helps that Google Inc., the most prominent backer of Android, is also supporting cloud computing services that will be used by Android phones.

In an interview, Alex Spektor also of Strategy Analytics, said the firm had pegged 800,000 Android smartphones shipped in 2008, including the G1 from HTC that's sold by T-Mobile USA. By the end of 2009, however, Strategy is predicting that 8 million Android devices will ship, he said.

The next new Android shipment will be from Samsung Electronics Co. for the i7500 Android-based smartphone to be sold in western Europe this summer, Spektor said. Motorola Inc. has also committed to selling Android devices by year's end in many parts of the world. HTC is providing two Android smartphones to Rogers Wireless in Canada starting June 2 as well. Huawei Technologies Co. is also expected to sell Android phones in China this year, analysts said.

Even though HTC makes the G1, the second version of the hardware is rumored to be coming from either Motorola or Samsung, although neither the manufacturers nor T-Mobile would comment.

Strategy predicted that iPhone shipments, based on an OS X variant, will grow by 79% in 2009, which sounds small compared with the Android projected growth, but is still very healthy. Longer term, however, Apple Inc. will not license the manufacturing of iPhone to other makers, which will restrict its potential to grow as well as Android devices.

"Android definitely has the potential to surpass iPhone in shipments," Spektor said. "When you have one device from one vendor like Apple, it's silly to think they will forever dominate the landscape."

Kevin Burden, an analyst at ABI Research in New York, called Strategy's forecast for Android "aggressive," and said his firm expects nearly 4 million Android units to be sold in 2009, and another 7 million in 2010. With only two models announced at this point, Android would have to accelerate quickly to reach 8 million in 2009, he said.

Huawei could sell good volumes of Android devices in China later in the year, and possibly elsewhere, but still not enough to reach the figures Strategy is predicting, Burden said.

Burden said his more conservative forecast shows the promise of Android and its potential to outsell the iPhone. "Could Android overtake iPhone? Absolutely. And I expect it will at some point because it is licensable by a variety of manufacturers. Meanwhile, Apple will never license the OS X variant."

The challenge for Android might become fragmentation, as device makers release different Android models. Some will be high-end smartphones but thers will sell at the low end, Burden said. Meanwhile, the Palm Pre, which is due from Sprint Nextel Inc. before the end of June, faces the same long-term fate of the iPhone since the Pre is also made by one company, he noted.

ABI said 21.2 million iPhones shipped through the first quarter of 2009, including 3.7 million in 2007 and 13.7 million in all of 2008, as well as 3.8 million in the first quarter of 2009.

This story, "Android Set to Outpace iPhone -- Eventually" was originally published by Computerworld.

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