The Android Revolution

You may recall our 2009 technology predictions, where we listed Google OS-based (Android) Smartphones as a new entrant to the market that year. Well, it turns out that Android has captured an impressive 17% of the Smartphone market so far, according to an industry research. Besides being an impressive accomplishment, Android’s success has many implications to the Smartphone market and beyond.

What’s Android?
Android is an operating system (OS) written specifically for Smartphones. Similar to the operating system on your computer, a Smartphone OS makes the hardware features accessible to the applications running on the phone. For example, the iPhone’s operating system is called iOS, and similarly Blackberry has the Blackberry OS. Google acquired a company called Android in 2005, whose technology was used as the basis of the mobile operating system that Google later released under the same same. Android, now available on Netbooks and Smartphones, is very easy to use, and enables some of the latest hardware advances on Smartphones. It’s also written on an open platform, meaning that developers can easily write applications to run on it.

Android Smartphones are now made by many major manufacturers including Motorola, Samsung, HTC, and offered through AT&T, Verizon, and Sprint.

The Impact
The obvious impact of Android phones is to the Smartphone market, where it’s been stealing shares from Blackberry and the iPhone to establish a respectable beachhead in little over a year since its availability. The advanced phone hardware, combined with the fluid drag-and-drop touchscreen interface  and other innovative features, Android phones give the iPhone a run for its money. In fact, in the second quarter of 2010 alone, Android stole 1.3% market share away from the iPhone. But perhaps the biggest loser in this game is turning out to be the Blackberry. Despite significantly increased investments to improve the usability and features of its phone, RIM (the company that makes the Blackberry) has failed to defend its dominant business Smartphone market share. What’s more is that Blackberry loses on two fronts as a result of this change, since it not only loses the sale of the phones, but also the software that it sells to corporations that enable Blackberrys as a business Smartphone.

Beyond Smartphones
What’s perhaps less obvious is Google’s systematic approach to capture share in the business market via its Google Apps and Gmail offerings. Traditionally, companies licensed software from Microsoft (called Exchange) to host their emails on corporate servers. They also bought corporate or individual licenses for Microsoft Office, to create and edit text, spreadsheet, and presentation documents. The Google offerings replace all of these licenses with online applications at a fraction of the cost to corporations. This not only takes lucrative business away from Microsoft, it also lures corporate users towards Android Smartphones as a companion technology to the Google services, further hurting Blackberry in its quest to protect its market share.