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Edition: U.S. Article Comments (4) Save Email Print Reprints Most Popular Most Shared Bangkok burns as protesters surrender | Video 11:36am EDT Euro rallies but stocks fall after German ban | Video 10:58am EDT Disgruntled voters take down veteran senator Arlen Specter 6:55am EDT Google beats Microsoft in smartphones, catching Apple | Video 11:37am EDT Analysts' View: Thai protest leaders surrender 5:04am EDT Germany's market curbs rattle Wall Street 10:43am EDT "Savagely beaten" Stanford asks to be freed 18 May 2010 UPDATE 1-Florida Keys tar balls are not from BP oil spill 9:09am EDT U.S. reverses stance on treaty to regulate arms trade 14 Oct 2009 Germany declares solo war on speculators 10:48am EDT Study suggests processed meat a real health risk 17 May 2010 Bangkok burns as protesters surrender | Video 11:36am EDT U.S. reverses stance on treaty to regulate arms trade 14 Oct 2009 Professional social networking booming 18 May 2010 Google beats Microsoft in smartphones, catching Apple | Video 11:37am EDT Pesticides tied to ADHD in children in U.S. study 17 May 2010 Disgruntled voters take down veteran senator Arlen Specter 6:55am EDT Twitter expects hundreds of advertisers 8:23am EDT Google beats Microsoft in smartphones: Gartner 3:54am EDT Euro rallies but stocks fall after German ban | Video 10:58am EDT VCs see Android gaining on iPhone Poornima Gupta and Alexei Oreskovic SAN FRANCISCO Wed May 19, 2010 9:10am EDT Related News Google to fight US govt if AdMob deal blocked Tue, May 18 2010 VCs see Android gaining on iPhone Tue, May 18 2010 Apple app investor Kleiner sees "frothy" market Tue, May 18 2010 Apple app investor Kleiner sees "frothy" market Mon, May 17 2010 Google to stop selling smartphone online Sun, May 16 2010 An advertisement for the Apple iPhone is shown at a retail store of an Orange mobile phone network provider in Bordeaux, southwestern France, October 23, 2009. Credit: Reuters/Regis Duvignau SAN FRANCISCO (Reuters) - Google Inc is posing a bigger challenge to Apple Inc in the mobile world as more and more start-ups develop applications for Google's Android software, venture capitalists said on Tuesday. Technology | Media While Apple's app store offers more than 200,000 games, tools and other software to jazz up the iPhone, against just 38,000 for Android, the openness of Google's mobile operating system is helping it gain popularity with developers. "I am quite impressed by the traction the Android ecosystem is getting," said Chris Moore, a partner with Redpoint Ventures, which has invested in online video store Netflix and IAC/InterActiveCorp's Ask.com. Moore told the Reuters Global Technology Summit that it felt as if as many start-ups were walking into his office to pitch Android applications as those for the iPhone. "I want to say that on the current trajectory, they (Android) will pass the iPhone platform, or at least reach parity by the end of this year or middle of next year." Earlier this month, research group NPD said smartphones running on Android accounted for 28 percent of U.S. unit sales in the first quarter, ahead of the iPhone's at 21 percent share. Research in Motion Ltd's BlackBerry was No. 1 at 36 percent. While Apple questioned the NPD data, saying it was based on a limited sample of consumers, venture capitalists in Silicon Valley are watching these trendlines very closely as they place bets on start-ups developing interesting mobile apps. App developers have to choose one of the mobile platforms to write software for, though they can adapt an application to run on other platforms. FRAGMENTED MARKET Google, Apple, RIM, Nokia, Microsoft and others are jostling for share in the global smartphone market, seeking to capitalize on the transition from personal computers to mobile devices. Rich Wong, partner of Accel Partners, an investor in social networking site Facebook and mobile advertising network AdMob, said he expects the mobile market to fragment further in the future and does not expect one dominant player to emerge. For example, while iPhone and Android are duking it out in the United States, Nokia's Symbian operating system is strong oversees and won't give up easily, he said. "It's not going to be a winner-takes-all environment," Wong said. "I think the fragmentation in this mobile space is forever." However, David Weiden, a partner with Khosla Ventures, said the current level of competition in the market, with five to eight operating systems jostling for share, is unsustainable and a few dominant players would emerge. "It's been a long time since such a significant market has been up for grabs," said Weiden, whose firm is invested in mobile device Jawbone and popular iPhone app Tapulous. "I personally doubt that things will be as fragmented in three years as they are right now," he said, adding that the mobile arena does not tend toward a winner-takes-all scenario as much as a Facebook does "because there is more natural diversity, but the amount of fragmentation right now is unstable." (Reporting by Alexei Oreskovic and Poornima Gupta; Editing by Steve Orlofsky and Matthew Lewis, Gary Hill) Technology Media Comments See All Comments (4) | Post Comment May 19, 2010 7:58am EDT I am developing Android application for facebook (social networking) with voice chat, voice messaging, and voice to text any VC interested in investing? I believe just like touchpad, people will quickly adopt voice instead of writing text. There is huge market with this idea. I can discuss more details, if anyone interested in investment. sam8 Report As Abusive May 19, 2010 9:04am EDT While I tend to agree that there will always be fragmentation in the phone OS arena , there are a few things Android has going for it. Not to mention a household name like Google behind it , it is based upon Linux and while it is a fork of Linux the word is that they are slowly trying to aim Android back into the Linux mainstream. This certainly gives the platform a wider audience of potential developers than an OS dedicated to but mobiles. There is also to be noted the steady migration of mobile applications towards HTML5 which brings in a further group of developers, many of whom are also Linux savvy. This further dovetails into cloud computing which is often phrased in terms of Internet applications , providing a situation where all the technologies involved can be easily shared across hardware platforms While there certainly will be a lot of “me-too-ism” to be had from all the phone OS providers, Android (Linux) , HTML5 make for a very natural fit both server side and client side in the mobile market. Thats my two cents on it. drclue Report As Abusive May 19, 2010 9:23am EDT Why are they always making such a big deal about Android market share passing the iPhone or even RIM’s BlackBerry. It’s just a matter of pure unit numbers. It’s not like Google is making any money from Android. The platform is a very cheap platform geared for unit growth only. Carriers are practically giving Android smartphones away. All those Android smartphones have almost no financial impact on the iPhone. Most of those carriers and many consumers would flip in a second if the iPhone were to become available to them. So no matter how large Android market share becomes it means very little since iPhone share will continue to grow and continue to make money for Apple. Android only makes money for individual vendors and I doubt if the smaller companies are making much money at all due to so much competition of various Android models. The iPhone will continue to have the bulk of smartphone revenue. sirberra Report As Abusive May 19, 2010 10:52am EDT I think a more plausible reasons for the development activity surrounding Droid has nothing to do with openness and more to do with competition. If I’m developing an app doesn’t it make sense to do that for a market consisting of thousands of competitors rather than one with hundreds of thousands?? Once Droid apps grow in number you will see development level off. Apple’s apps serve all its platforms including desktop, laptop and smart phone… certainly more appealing to good programmers. waveonshore Report As Abusive See All Comments (4) Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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