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Android someday will outdistance the iPhone

The number of mobile phones using the Android operating system will eventually be huge, even if the number of Android smartphones shipped doesn't grow by 900% this year as one 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 at Strategy Analytics in Newton, Mass. Exactly when that will happen is unknown, although it certainly won't happen this year or even in 2011.

Strategy Analytics analyst Tom Kang predicted in a recent report that shipments of Android devices would grow 900%, but that projection was based on Android's introduction in 2008 in the U.S. — and it's also the rate at which Android devices are 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 that 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, according to Strategy Analytics. 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, another Strategy Analytics analyst, Alex Spektor, said the firm estimates that 800,000 Android smartphones shipped in 2008, including the G1 from HTC that's sold by T-Mobile USA. Strategy is predicting that 8 million Android devices will have shipped by the end of 2009, he said.

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

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 on that subject.

Strategy Analytics predicted that shipments of the iPhone, which is based on a Mac OS X variant, will grow by 79% in 2009. That figure sounds small compared with Android's projected growth rate, but it's very healthy nonetheless. Longer term, however, Apple Inc. will not license the manufacturing of iPhones to other handset makers, a decision that will restrict the iPhone's potential to expand as fast 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 that his firm expects Android sales to total nearly 4 million units in 2009 and 7 million in 2010. With only two models announced at this point, Android sales would have to accelerate quickly to reach 8 million in 2009, he said.

Huawei could sell good numbers of Android devices in China — and possibly elsewhere — later in the year, but those sales would still not be 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 others 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 as the iPhone, since the Pre is made by just one company, he noted.

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

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