The Real Winner In The iPhone vs. Android Battle

| June 11, 2010

Last December I finally took the plunge… I gave up my old flip-phone and got a smartphone.

I bought the Motorola Droid on the Verizon Wireless network.  And I’ve got to admit I love the mobile computing power these little computer/phone combos offer.  I don’t think I can ever go back to a ‘dumb’ phone again.

I just can’t see giving up all of the handy mobile tools the Droid has.  It’s really amazing how much stuff these little things can do.

Things I did on my old phone like check email, text message, take pictures, and surf the internet are much easier and faster on the Droid.  And I can’t imagine living without new features like GPS, weather (it’s sunny with a high near 90 today in Arizona), and a mobile application from my brokerage.

It’s fair to say I’m not going to be giving up my smartphone anytime soon.  And according to an article released by Nielsen.com last Friday, I’m not alone.

Mobile consumers are turning to smartphones in ever increasing numbers. Back in the 2nd quarter of 2009, 16% of people with a mobile phone had a smartphone.  By the 1st quarter of 2010, that number had shot up to 23%.

That number gives me chills.  Only 23% of mobile consumers are using smartphones… There’s still a lot of growth for this market!  That means smartphones should drive sales growth and profits for years to come.

Who will come out on top?

The race for smartphone market share gets a bit confusing.  There doesn’t seem to be a common definition of a smartphone.  So one source may count certain phones as smartphones, while others don’t.

As far as I can tell, the battle for smartphone supremacy is a four horse race.

Apple iPhone (AAPL), Google Android (GOOG), Microsoft Windows Mobile (MSFT), and RIM Blackberry (RIM) are the four operating systems with the most market share.

And according to Nielsen.com, Apple and Android both added 2% to their market share in the first quarter.  At the same time, Microsoft and RIM both lost 2% in the first quarter.

It’s a trend that will continue to shape the industry.

The driving force behind the market shift is the intense loyalty Apple and Android users have for their operating system.

It’s setting the stage for an Apple iPhone versus Google Android showdown!  We’re going to see two tech industry heavyweights squaring off for smartphone supremacy.  It should make for a great show.

And the real winner is… the consumer.  An intense competition should drive prices down and keep pressure on the companies to advance the technology.

As the technology rapidly advances, we’ll get another winner in the smartphone race… the handset makers.

The handset makers will be able to continue rolling out new phones.  They’ll be loaded with the latest and greatest operating system.  And they’ll have more features and better batteries.  Loyal users will upgrade frequently and drive an ever growing stream of revenue into the hands of the handset makers.

There’s one handset maker who’s beaten down stock looks very attractive right now.

Motorola (MOT) has some really good things going right now.  It’s a story being driven by their partnership with Google’s Android system.  Co-CEO Sanjay Jha said the company is selling as many Droids as they can make.  But they’re actually being held up by a shortage of certain components.

The next wave of advancement for smartphones looks to be mobile video conferencing.  This will require phones with front facing cameras.

And MOT is launching at least two new phones with front facing cameras soon.  This will enable MOT to grab more sales if mobile video conferencing takes off.

The battle for smartphone supremacy is just getting warmed up.  I think the handset makers are in a great position to reap the benefits.  Take a look a Motorola, I think they’re a great buy right now.

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Category: Stocks

About the Author ()

Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets on a daily basis. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

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