Android has grown rapidly into the world’s most popular smartphone platform due in large part to its open source nature. Analyst, Avi Greengart, noted that, since Android can be modified by licensees, Android has the widest array of hardware options, ranging from low-end, sub-$100 phones from the likes of Huawei and ZTE all the way through phones like the LG Spectrum with 720p HD displays.
The platform is also rapidly becoming as much of a priority for developers as iOS, and the 400,000 apps in the Android Market attest to the platform’s reach and popularity (even though roughly two-thirds of the apps in the Market are free). One of the key benefits to end-users remains their ability to customize their Android experience as they see fit, giving them greater power and flexibility to define their mobile experience.
Despite all these positives, there are some chinks that are starting to show in Android’s armour. In the early days of Android, carriers grasped the platform as a way to differentiate themselves, especially if they didn’t have the iPhone. However, as the number of Android licensees grows, with each attempting to outdo each other, it’s becoming more and more difficult for licensees to stand out and make a profit–as recent results from HTC, Motorola and Sony Ericsson demonstrate. The only real successes seem to be at the high end of the market (Samsung) and the low end (Huawei and ZTE). “For the middle part of Android, if they don’t make something happen soon it’s going to be a bifurcated market,” said ABI Research analyst Michael Morgan.
Additionally, even though Android’s tablet market share is growing, it has not been nearly as successful there as it has in the smartphone market. “There has been no champion carrier in the tablet as there has been in the smartphone space with Verizon, which continues to aggressively promote Android,” noted NPD Group analyst Ross Rubin.
The continued threat of fragmentation also looms over Android. A recent report indicates fragmentation may not be as big a threat as some have made it out to be–mobile app analytics firm Localytics states that 73 percent of all apps leveraging its analytics solution run Android 2.3, or. Gingerbread. Another 23 percent of user sessions run some flavor of Android 2.2, or Froyo, meaning that developers targeting both OS builds can achieve 96 percent compatibility across the Android ecosystem. But developers will still have to take into account different Android screen sizes and hardware options, as well as new OS iterations from Google. Motorola’s Christy Wyatt recently pointed to hardware differentiation on chipsets, radio bands and other factors as a key cause for the slow nature of Android software updates.
There are several key challenges facing Android this year. One will be how Motorola is integrated into Google. The EU and the Department of Justice just approved Google’s $12.5 billion acquisition of Motorola. The company has insisted that it will not give Motorola special treatment among licensees. But some see problems anyway. “How do you compete with your licensees?” Greengart said. “No one has ever done that successfully.”
Morgan said he doesn’t think the Motorola integration will be a challenge, noting that Google gains nothing from locking out its licensees. The key challenge in his view is helping licensees in the middle of the market compete, perhaps by creating a more unified content ecosystem for the platform. But companies such as HTC and Sony appear to be going in the opposite direction with their own offerings.
Another challenge facing Android is the threat of burdensome royalty payments on patents. Microsoft has already staked out a solid position as an apparent owner of patents critical to Android, and Apple could emerge in a similar position if it is successful in the courtroom. But Google is hoping its purchase of Motorola will blunt Android from such attacks. It remains to be seen whether that strategy will be successful.