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Android overtakes iPhone for No. 2 smartphone OS

According to the company’s report, in order to compete with the iPhone, Verizon Wireless expanded its buy-one-get-one offer beyond RIM devices to include all of its smartphones. Based on unit sales to consumers last quarter, Android moved into second position at 28 percent, RIM at 36 percent and Apple at 21 percent.

“We saw Android continue to grow and move into second place for smartphone market share,” said Ross Rubin, director of industry analysis and consumer technology at the NPD Group, New York.

“Our findings show that the carriers are very instrumental in determining which handsets and operating systems gain exposure,” he said. “There’s far more handset models available for the Android operating system.

“Verizon wireless has promoted the Droid heavily and at a lower price.”

Android on the rise
The report shows that smartphone sales at AT&T comprised nearly a third of the entire smartphone market with 32 percent, followed by Verizon Wireless with 30 percent, T-Mobile with 17 percent and Sprint with 15 percent.

“The thing you see with the iPhone is that it is just one device, while Android has different devices on multiple carriers and more devices are coming to the market,” said Noah Elkin, senior analyst at eMarketer, New York.

“Those carrier partners have put a lot of marketing muscle behind the Android devices in an effort to outsell the iPhone,” he said. “The iPhone has maintained a remarkable desirability and as much as consumers want smartphones, they are price sensitive and another smartphone with a lower price is something that can steer them away from the iPhone.

“Those are some of the factors behind this surge in Android sales – it can only continue to grow since it’s still new.”

Smartphones are all the craze
According to the report, the growing popularity of smartphones and messaging phones resulted in slightly higher prices for all mobile devices, despite a drop in the number of mobile phones purchased in the first quarter.

In the first quarter, the average selling prices for handsets reached $88 – a 5 percent increase from the first quarter of 2009.

Smartphone unit prices averaged $151 in this year’s first quarter – a 3 percent decrease over the previous year.

“If the carriers market the devices heavily they can outsell the iPhone, even if they don’t have the same appeal as the iPhone,” Mr. Elkin said. “Apple is rumored to come out with a new version of its iPhone and if Verizon gets a version of the iPhone, that will drive up its sales – and that’s a big if.”

“The smartphone market has two big competitors: Apple vs. Android,” he said. “BlackBerry continues to be a big player, but I think they are in the midst of transition – from corporate to a mixed consumer audience, whereas iPhone and Android are going in the opposite direction.”

So what does this mean for advertisers?

“It means that there’s a viable alternative to the iPhone and to the apple platform,” Mr. Elkin said. “Apple is getting ready to launch iAd, and the stakes are pretty high.

“They may be too high for many advertisers or simply more than many advertisers are willing to commit to a mobile campaign,” he said. “There are a growing number of Android devices and users who are as active as iPhone users.

“That makes Android a good competitor and a good alternative to Apple’s iPhone.”