Motorola DroidThe latest evidence that Google's (GOOG) fast-rising Android operating system is gaining ground in the smartphone sphere comes from online traffic counter Quantcast. It has released data showing that Android now owns 25% of the U.S. mobile Web-browsing market. That's an impressive 3% jump over the past two months.

What's more, Quantcast also found that Apple's iOS dropped in market share from 58% to 56%, despite soaring sales of Apple (AAPL) iPads and iPhones. During the past quarter, Android's share of mobile Internet consumption has risen by 5.5%, while Apple's has shrunk by 3.1%. So what gives?

Fast Processors Are Key

A couple of possibilities come to mind. First, Android is getting better, faster and stronger with each iteration. No, it's still not as polished as Apple's iOS, and mileage varies depending on the hardware platform. On lesser phones with slower processors, Android chokes on processor-intensive voice-recognition and GPS functions that are bandwidth hogs. But such functions work flawlessly on the Droid 2 and other higher-end Android smartphones.

As more and more carriers roll out Android, the positive word of mouth on Android grows and so does its market share. Does this mean the iPhone's iOS is inferior? Hardly. But in this sense, it's nearly impossible for Android not to gain some share due to Apple enormous head start. Call it the law of large smartphone sign-up numbers.


A second possibility also exists, and it's closely related to the first. Not only does Apple have a head start but its dependence on AT&T (T) as its single distribution channel in the U.S. also robs the iPhone of the type of ubiquity Android enjoys. If that's been part of Android's rapid ascent, then the much-anticipated announcement that Apple will spread the iPhone love to other carriers could have a jolting effect on its market share in the mobile-Web market.

As each marginal customer acquisition becomes more difficult for Apple (this is simply a market reality -- winning new customers is always much harder after you've scooped up the most willing), the current lack of distribution makes it harder for that non-Apple customer to encounter an iPhone in the flesh, either through intention or serendipity. Until that changes, advantage Android.

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