Is Android Doomed? (Blog)

Smartphones powered by Google's open-source Android operating system are selling more units, all together, than Apple's iPhone is selling. More than four out of ten of all smartphones sold in the US are powered by Android, compared to a little over a quarter for Apple. And its share just continues to rise, as Windows Phone and BlackBerry rivals stagnate.



How, then, could Android be doomed?



The shape of the market



Android phones aren't gaining ground at Apple's expense. Both Android and the iPhone are crowding their rivals out. And most of their sales volume comes not from switchers from one platform to the other, but from people who are upgrading from a featurephone.



Horace Dediu of Asymco has posted graphs showing the rate at which smartphones are eating into non-smartphone market share. Meanwhile, another set of charts shows smartphone and non-smartphone market share growth broken down by company.



The upshot? Android and Apple are having a feeding frenzy, on the market of people who haven't bought smartphones yet. And when they're done, they're going to turn on each other.



Guess who's already winning



Another set of charts by Dediu shows what people use iPhones and Android phones for. On average, Android phones are used far less for web browsing or buying paid apps; indeed, the data suggest that most Android phone buyers aren't using them for much more than "featurephone" services.



iPhones, meanwhile, are selling to people who are more willing (for whatever reason) to pay a premium for smartphones and apps. And it shows: No smartphone company even comes close to matching Apple for profit per handset sold.



The piles of money that Apple is sitting on equal even more spending on research and product development, plus the potential ability to monopolize the supply chain. Maybe not everyone wants an iPhone, or can even afford one. But when Android largely blends in to the non-smartphone market, in the minds of many buyers, that solidifies the iPhone's position as the one and only brand name smartphone.



Internal troubles as well



Making things worse for Android in general is Google's attempt to purchase Motorola Mobility. It's sent South Korea into a panic, and companies like Taiwanese HTC were already trying to differentiate their Android smartphones to the point of having a separate interface. Meanwhile, Barnes and Noble and Amazon are happily taking the open-source Android code and running with it, creating their own tablet operating systems which differ substantially from plain vanilla Android.



Maybe Android itself isn't doomed. But its fragmentation has already started, and its ability to compete with the iPhone in the long run seems dubious ... unless its goal is to become the neat featurephone OS, a la Symbian.