May 11, 2010, 4:42 PM

Android overtakes iPhone in mobile operating system race

The iPhone beware: Google Inc.’s Android operating system continued to shake up the U.S. mobile phone market in the first quarter of 2010, moving past Apple Inc.’s iPhone OS to take the No. 2 position among smartphone operating systems, according to the NPD Group, a market research firm. Based on smartphone sales last quarter, the Android operating system moved into second position at 28% of market share behind Research in Motion’s BlackBerry OS at 36% and ahead of Apple’s iPhone OS at 21%.

The iPhone beware: Google Inc.’s Android operating system continued to shake up the U.S. mobile phone market in the first quarter of 2010, moving past Apple Inc.’s iPhone OS to take the No. 2 position among smartphone operating systems, according to the NPD Group, a market research firm. Based on smartphone sales last quarter, the Android operating system moved into second position at 28% of market share behind Research in Motion’s BlackBerry OS at 36% and ahead of Apple’s iPhone OS at 21%.

“As in the past, carrier distribution and promotion have played a crucial role in determining smartphone market share,” says Ross Rubin, executive director of industry analysis at NPD. “In order to compete with the iPhone, Verizon Wireless has expanded its buy-one-get-one offer beyond Research in Motion devices to now include all of their smartphones.”

This is big news for retailers in mobile commerce—or considering m-commerce—because the overwhelming majority of retailers offering apps have created the shopping applications for the iPhone and not for any other smartphone operating system. Most retailers have bypassed the BlackBerry because BlackBerry owners tend to use their devices primarily for business purposes. iPhone owners, on the other hand, are heavy users of apps and the mobile web and are thus primed for m-commerce, mobile experts say.

Users of Android-based phones, which several manufacturers produce in contrast to the iPhone that’s made only by Apple, are more like iPhone users, experts say. They buy the devices for personal, not business, use, and focus on apps and the mobile web. This means retailers in m-commerce should give serious consideration to which smartphone operating system or systems they design shopping apps for.

Platform fragmentation is the reality for now in mobile handsets and each of the three major platforms represents a sizable number of consumers that retailers ignore at their peril, cautions Dave Sikora, CEO of Digby, an m-commerce technology provider that builds apps and sites.

“Android has grown substantially during the last six months, but it’s going to be a three-horse race with BlackBerry and the iPhone for the next three to four years,” Sikora says. “A safe bet is for retailers to figure out their customer demographics—check the traffic coming to their sites from the different mobile devices, survey customers, and find out the most pervasive device or devices in their customer universe.”

The NPD Group compiles and analyzes mobile device sales data based on more than 150,000 completed online consumer research surveys each month. Surveys are based on a nationally balanced and demographically representative sample, and results are projected to represent the entire population of U.S. consumers.

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