Android phones outsell iPhone 2-to-1, says research firm

Google's OS powers 44 per cent of smartphones sold in U.S. last quarter; Apple's iOS far behind

Android-powered smartphones outsold iPhones in the U.S. by almost 2-to-1 in the third quarter, a research firm said today.

Analysts explained the Android boom by pointing out the plethora of manufacturers that equip their smartphones with Google's mobile operating system, and highlighting their availability on all the major U.S. carriers.

"We started to see Android take off in 2009 when Verizon added the [Motorola] Droid," said Ross Rubin, the executive director of industry analysis for the NPD Group. "A big part of Android success is its carrier distribution. Once it got to the Verizon and Sprint customer bases, with their mature 3G networks, that's when we started to see it take off."

According to NPD's surveys of U.S. retailers, Android phones accounted for 44 per cent of all consumer smartphone sales in the third quarter, an increase of 11 percentage points over 2010's second quarter. Meanwhile, Apple's iOS, which powers the iPhone, was up one point to 23 per cent.

Research in Motion's (RIM) portion of the smartphone pie was 22 per cent for the third quarter, down six percentage points from 2010's second quarter.

RIM's decline is easy to explain, said Rubin. "That's also related to the carrier distribution, which is difficult to underestimate," he said, noting that the carriers that now sell loads of Android phones are the same ones that have traditionally been major suppliers of RIM's BlackBerry.

RIM introduced its newest smartphone, the BlackBerry Torch 9800 , in August. The handset is available only through AT&T, the U.S. carrier that also has an exclusive deal with Apple to sell the iPhone .

"That's why the Torch at AT&T isn't doing much to hold back the Android onslaught," Rubin said. "It's only on AT&T."

Kevin Restivo, an analyst with IDC, echoed Rubin's reasoning for Android's surge. "It's the collective growth in sales of HTC and Motorola," he said.

The trend has been building throughout the first half of the year, both Restivo and Rubin said.

In the first six months of 2010, Android accounted for 30.8 per cent of all smartphone sales in the U.S., up from just 4.6 per cent in the first half of the year before, said Restivo, citing IDC data. Apple's iOS, on the other hand, slipped from 21.1 per cent in the first half of 2009 to 19.8 per cent in the first six months of 2010.

RIM's sales share plummeted during the same period, falling from 51.4 per cent in 2009 to 35.5 per cent this year.

"Android has made its mark on the smartphone market, irrespective of what quarter we're talking about in 2010," said Restivo. IDC has not yet compiled its third-quarter sales estimates by operating system.

Apple will have a tough time matching Android smartphone sales until it breaks free of the exclusive partnership with AT&T, Rubin argued. "It's difficult for them to compete in market share leadership with just one carrier," he said.

Rumors that Apple will soon offer the iPhone to other U.S. carriers, primarily Verizon, pop up on a regular basis. Last month, the Wall Street Journal reported that Apple would add Verizon to its U.S. carrier stable early next year, a timeline that Brian Marshall of Gleacher & Co. said his sources confirmed .

Rubin offered another reason for Android's strong sales.

"The story for Android in 2010 is that, for most manufacturers and carriers, there really hasn't been any alternative," Rubin said. Microsoft 's Windows Mobile faded badly this year, and its Windows Phone 7 has yet to appear on handsets in the U.S. And AT&T has Apple's iOS locked up for now. That left Android as the default OS for what Rubin called "modern" smartphones.

"Multiple manufacturers [with Android phones] provide more consumer choice in the marketplace," said Rubin.

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