With dozens of smartphones spanning multiple manufacturers and all four major U.S. operator networks, it was inevitable that Android sales would surpass the iPhone sooner or later, and that time is now. Android represented 28 percent of first quarter smartphone unit sales in the U.S.–behind only Research In Motion’s BlackBerry (36 percent) and seven percentage points ahead of iPhone–according to new data issued by market research firm NPD Group, which credits carrier distribution and promotion as catalysts behind the Google operating system’s growth. “In order to compete with the iPhone, Verizon Wireless has expanded its buy-one-get-one offer beyond RIM devices to now include all of their smartphones,” said NPD executive director of industry analysis Ross Rubin in a prepared statement.

Android’s sales surge caps off an impressive quarter for the OS–in mid-April, Google said application inventory in its Android Market storefront increased 70 percent quarter-over-quarter, and according to tracking service AndroLib, there are now more than 50,000 Android applications in all, up from about 40,000 roughly a month ago. Of course, Android Market still lags far behind Apple’s App Store, which boasts more than 200,000 applications for the iPhone and iPod touch according to Apple’s latest count.

But Google is reportedly stepping up its efforts to court iPhone developers to write for Android, reaching out directly to programmers to convince them to expand their creative horizons. Last month, The New York Times’ David Pogue received a message from iPhone app developer Texts From Last Night, which was recently contacted by a Google representative claiming to write on behalf of the digital services giant’s Android Advocacy Group. “He basically said that he wanted to open a line of communication with me in case I chose to port the app to Android, and he offered to ship me a free Nexus One to play around with… Contrast with Apple’s approach: it took us about three months of resubmitting our app to Apple before they stopped rejecting it for inappropriate content. And even now (after we peaked at the No. 7 paid app), we still have no relationship with anyone there. Huge difference in approaches between the two companies.”

And yet for all the developers who’ve run afoul of Apple’s draconian App Store approval policies, defections from the iPhone platform remain relatively few and far between. Chalk it up to the bottom line: Bernstein Research analyst Toni Sacconaghi estimates that iPhone developers presently generate $1 billion to $1.8 billion in annual App Store sales. That number stands to get a whole lot bigger: Sacconaghi forecasts Apple’s forthcoming iAd mobile advertising initiative could yield developer revenues reaching $825 million this year, an annual increase between 40 percent and 80 percent. (TechCrunch reports the iAd effort will incorporate the new ViP [Verification of iTunes Purchases] Program for App Downloads, a real-time conversion tracking system that will tie the ad directly into purchasing data from iTunes–according to an email pitch sent to select developers by mobile advertising network Quattro Wireless, acquired by Apple earlier this year, iAd will boast features that “cannot be duplicated by any of [Apple's] competitors.”)

Sacconaghi’s estimates are even more astounding given that estimates for total U.S. spending on mobile advertising in 2009 range from $184 million to $416 million. But iAd is not like past mobile advertising programs–The Wall Street Journal reports Apple is planning to charge marketers as much as $10 million for inclusion in the first wave of iAd promotions when the service goes live on iPhone and iPod touch devices in June. By comparison, ad execs say they typically pay between $100,000 and $200,000 for similar mobile deals. Sacconaghi anticipates Apple will collect about $815 million from iAd this year–$550 million from apps and $265 million from media providers like publishers and television networks–which the analyst contends would afford the company the latitude to subsidize the iPhone moving forward. If that’s true, then all bets are off. Android sales may have edged past iPhone for now, but iAd–and the new opportunities it portends for Apple and developers alike–could shift the balance of power once again. -Jason

Four weeks after the U.S. retail release of Apple’s iPad, it’s clear the company has another hit on its hands. On Monday Apple announced sales of the tablet have already surpassed the 1 million benchmark–by comparison, the company needed 74 days to sell the first million iPhone units. Consumers have downloaded more than 12 million iPad applications from Apple’s App Store, as well as over 1.5 million ebook titles from the new iBookstore. Apple notes that developers have now created over 5,000 new applications expressly for the iPad–the device also runs almost all of the App Store’s 200,000-plus applications for the iPhone and iPod touch.

Not bad for a device that many skeptics initially greeted as the biggest folly since the Esdel first rolled off the Ford assembly line in late 1957. For all of the early criticisms and complaints–no support for Adobe Flash, no camera, no multitasking capabilities, etc.–the iPad appears to have captured the collective imagination of the Apple faithful. In late April, technology journal Wired reported that the iPad already accounts for 26 percent of mobile traffic to its website: Mobile devices make up between 2.6 percent and 3.5 percent of total Wired.com traffic, and from April 3 through April 19, the iPad represented 0.91 percent of total site traffic. Most intriguing, Wired adds that the sudden increase in iPad traffic correlates with a declining share of iPhone and iPod Touch users, suggesting that most iPad visitors are existing Apple mobile device users trading up to a bigger screen.

“Bigger” seems to be the operative word here–everything about the iPad is larger, including the developer revenue opportunity. One of the early iPad success stories is Vimov’s Weather HD, a 99-cent application boasting current and forecast meteorological updates presented in high-definition video. A recent Vimov blog entry analyzes Weather HD’s App Store success, reporting that downloads reached the 3,500 mark in connection with the iPad’s Apr. 3 launch, slipped below 1,000 per day a week later, then jumped back as high as 2,300 by mid-month. Correlating its internal accounting with the App Store sales and rankings of other iPad applications, Vimov estimates that on Apr. 15 alone, the top 100 premium iPad apps collectively took in $304,058 in revenue–the firm also calculates that the top 1,000 apps are earning roughly $372,000 per day, translating to about $136 million in annual U.S. sales. Factor in the international market, and Vimov forecasts that iPad application sales could average $272 million per year.

It’s no wonder that free iPad applications are relatively scarce. According to data compiled by app store analytics firm Distimo, 80 percent of all iPad applications fall into the Paid Apps segment–by comparison, 73 percent of iPhone and iPod touch applications carry premium price tags, while the average iPad app costs $4.67, as opposed to $3.82 on iPhone. Medical apps for iPad lead the way at an average price of $42.11, followed by Finance apps at $18.48; on the iPhone, Medical apps average $10.74, and Finance apps average $5.74. From the screen size to the app prices, it’s obvious that bigger is better for the first wave of iPad developers–and equally recognizable that their ranks are only going to keep growing from here. -Jason

Roughly a year after its initial launch, Research In Motion’s BlackBerry App World now features about 6,000 applications for BlackBerry devices–double the number available in October 2009–according to RIM senior vice president Jeff McDowell. In an interview with Bloomberg, McDowell says the manufacturer is looking to boost BlackBerry App World’s inventory as RIM pushes into the China, Indonesia and India markets–a team is already in China to collaborate with developers there in advance of new BlackBerry phones tailored for the massive Chinese subscriber market. “There are a lot of applications that already traverse borders but at the same time, building a local community of applications is important,” McDowell said. RIM declined to divulge the number of BlackBerry App World downloads registered over the last year.

Although BlackBerry App World lags more than 100,000 applications behind rival Apple’s App Store, BlackBerry application usage is higher and more concentrated during workdays than iPhone app usage according to new data issued by mobile analytics firm Localytics. Despite RIM’s efforts to court the consumer segment, Localytics reports that BlackBerry app behaviors remain dominated by professional users–BlackBerry app usage is higher throughout the workday and begins to peak at 7 p.m. EST, two hours earlier than the iPhone. Moreover, there is no significant statistical difference between BlackBerry app usage on weekdays and weekends. By comparison, iPhone owners are most active on the weekends–usage at 2 p.m. on Saturdays and Sundays is 40 percent higher than at the same time Monday through Friday.

For more on BlackBerry App World’s growth:
- read this Bloomberg article

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Mobile software developer Bolt Creative announced its Pocket God has now sold more than 2 million copies via Apple’s App Store–according to the firm, it’s the first premium iPhone and iPod touch application to reach the 2 million sales benchmark. First released in January 2009, the 99-cent Pocket God–a casual game giving users the opportunity to rule their own remote island, complete with deity-like powers–has released close to 30 free updates in the last 12 months; Bolt Creative reports the title has moved as many as 53,000 units in a single day, and downloads topped 100,000 per week throughout the holiday season.

For more on the Pocket God milestone:
- read this release

Smartphone shipments worldwide will increase to 390 million units by 2013–a compound annual growth rate of 20.9 percent over the 2009-2013 forecast period in question–according to research firm IDC. While IDC predicts the Symbian operating system will retain its global leadership position over that time thanks largely to Nokia’s dominance in markets outside of the U.S., Android is expected to experience faster growth than any of its rivals, leaping from 2008 shipments of 690,000 to 68 million units by 2013, a CAGR of 150.4 percent. IDC adds Android will benefit from the growing footprint of handset vendors supporting the platform, and will finish second to Symbian in shipments by 2013.

On the flipside, IDC forecasts Linux and Palm’s webOS shipments will struggle throughout the forecast period. Shipments of Linux-powered devices are expected to trend down due to greater emphasis on the Android platform, although some vendors will continue to support the platform–as for webOS, IDC believes the operating system will grow steadily, but will ultimately capture only narrow market share as a result of limited deployment and operator availability.

For more on the IDC forecast:
- read this release

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Consumers worldwide will download about 4.51 billion mobile applications in 2010 according to a new forecast issued by research firm Gartner, increasing from 2.51 billion downloads last year–that translates to app store revenues close to $6.8 billion, up from $4.2 billion in 2009. Gartner anticipates that free applications will represent 82 percent of app store downloads in 2010, a number that will grow to 87 percent of downloads in 2013 even as expected revenues jump to $29.5 billion: Gartner estimates corresponding mobile advertising revenues will leap from $600 million per year in 2009 to about $7 billion in 2013 as developers embrace a host of mechanisms to subsidize their efforts. Gartner contends that developers have little choice but to pin their hopes on mobile advertising, arguing that as smartphones continue to come down in price, the new wave of mass-market users will be reluctant to pay for mobile software. “Growth in smartphone sales will not necessarily mean that consumers will spend more money, but it will widen the addressable market for an offering that will be advertising-funded,” Gartner research director Stephanie Baghdassarian said in a prepared statement. “The value chain of the application stores will evolve as rules are set and broken in an attempt to find the most profitable business model for all parties involved.”

But some experts question whether existing mobile advertising concepts and approaches are on the right track. The doubters are said to include Apple CEO Steve Jobs, who believes “mobile ads suck” according to BusinessWeek, citing a source familiar with Jobs’ thinking. So Apple reportedly is exploring new approaches to mobile advertising in the wake of its recent agreement to acquire mobile ad network Quattro Wireless, plotting ways to exploit consumer data to better serve mobile advertisements. Insiders say Apple’s efforts seek to make ads more relevant to consumers, factoring into the equation data like purchases and downloads from iTunes and the App Store as well as geo-location. “[Apple] could also use the iPhone’s capabilities in creative ways–say, having someone shake the device to win a rebate the same way they do to roll dice in games,” the report notes.

Despite Gartner’s app store revenue projections for the year ahead, more than half of developers are pessimistic about their immediate financial outlook. A new Mobile Entertainment Forum study examining the state of the U.S. mobile content value chain reports that among 100 respondents from 80 companies spanning across the mobile entertainment landscape, 42 percent said they expect at least a 20 percent revenue increase in 2009, and 58 percent anticipate comparable revenue growth in 2010–app developers are less optimistic than any other industry segment the MEF polled, with only 48 percent believing revenues will increase 20 percent or more this year. MEF Americas chairman Jim Beddows theorizes developers have serious doubts about the longterm viability of current marketplace conditions: “The explosion of app stores and applications continues to feed consumer demand, but it’s still not proven whether there’s a sustainable revenue model,” he said in an interview with FierceDeveloper. Nor is it proven that mobile advertising is the solution to those concerns, but if not, then what is? -Jason

If 2009 was the year that manufacturers and developers fully embraced Google’s Android mobile operating system, then 2010 is already shaping up as the year consumers follow suit. According to new data published by research firm ChangeWave, 4 percent of smartphone owners surveyed in mid-December say they’re currently using Android, up three points over September totals; more significantly, 21 percent of respondents planning to purchase a smartphone in the next 90 days say they’d prefer the device run on the Android OS–a 15 point jump in just three months. ChangeWave notes that as of September 2009, Android was tied for dead last in consumer preference among the major operating systems–now, it’s in second place among future buyers, behind only the iPhone OS X at 28 percent, down 4 percentage points in the last three months. Android’s rise also comes at the expense of Microsoft’s Windows Mobile and Palm’s webOS–6 percent of consumers say they plan to purchase a WinMo device, down from 9 percent in September, while webOS slipped from 6 percent to 3 percent quarter-over-quarter. Only Research In Motion’s BlackBerry OS held relatively steady between September and December, increasing from 17 percent to 18 percent among prospective smartphone buyers.

ChangeWave forecasts that Motorola’s Droid stands to benefit most from consumer demand for Android devices–in fact, 13 percent of shoppers say they plan to purchase a Motorola smartphone in the next three months, a 12-point jump over September 2009 and the handset maker’s first increase in a ChangeWave consumer smartphone survey in three years. In addition, 9 percent of prospective smartphone buyers are now eyeing HTC devices, up from 5 percent in the previous survey, corresponding with the November release of the Droid Eris. Word of mouth is also working in Android’s favor, with 72 percent of current Android users telling ChangeWave they’re very satisfied with their smartphone, behind iPhone users at 77 percent but well ahead of BlackBerry (41 percent), Palm OS/webOS (33 percent) and Windows Mobile (25 percent).

Not all Android purchases are looming in the immediate future–it appears that a large number of consumers received Android devices over the holidays as well. Mobile application analytics provider Flurry reports Android Market app downloads increased 22 percent between November and December, with downloads to Droid units up 93 percent on Christmas Day over previous Fridays last month. In all, the Droid now accounts for 49 percent of all Android Market downloads, followed by the myTouch 3G at 18 percent, the HTC Hero at 17 percent and the G1 at 16 percent. Flurry adds that Apple’s App Store download volume is still more than 13 times greater than Android Market–regardless, Android has made enormous strides over the past year, and that trend will continue in 2010. -Jason

Application downloads via iPod touch devices eclipsed iPhone downloads by 172 percent on Christmas Day 2009, according to data compiled by mobile application analytics provider Flurry. Total iPod Touch download volumes grew by nearly 1,000 percent on Dec. 25 compared to the average of all previous Fridays during the month– Flurry speculates that in addition to new iPod touch 3G models received as gifts, iTunes gift cards also drove downloads across earlier generation iPod touch devices. In addition, iPod touch download volumes topped iPhone downloads by 104 percent on Dec. 26. Cumulative App Store downloads increased by 51 percent in December 2009 compared to November totals, Flurry reports.

In early December, Flurry reported the iPod touch accounts for about 40 percent of all iPhone OS-based devices sold worldwide–moreover, the firm contends that the portable media player may boast even greater long-term strategic value than its smartphone sibling, because it’s building a loyal consumer base among teens and pre-teens representing the next generation of iPhone users. “When today’s young iPod touch users age by five years, they will already have iTunes accounts, saved personal contacts to their iPod touch devices, purchased hundreds of apps and songs, and mastered the iPhone OS user interface,” Flurry notes. “This translates into loyalty and switching costs, allowing Apple to seamlessly ‘graduate’ young users from the iPod touch to the iPhone.” As of June 2009, the iPhone accounted for 57 percent of application user sessions tracked by Flurry–the iPod touch represented 31 percent, and Android devices were responsible for 10 percent. As of late November, total user sessions increased across all three devices, with the iPhone accounting for just 50 percent of sessions on average–the iPod touch’s share of user sessions grew to 35 percent, followed by Android at 14 percent.

For more on the App Store’s December growth spurt:
- read this Flurry blog entry

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While 94.4 percent of iPhone users have upgraded their smartphones to run on iPhone OS 3.0, only 52.24 percent of iPod touch users have made the switch according to a new study released by online advertising network Chitika. The iPhone OS 3.0 software update, issued in mid-June, is free to iPhone owners, but iPod touch users must pay between $5 and $10, depending on when they purchased their device–iPod touch units shipped within the last six months arrive with iPhone OS 3.0 preinstalled.

“What’s it all mean?” Chitika asks. “Well, despite its hype, iPhone OS 3.0 had very little to offer iPod Touch users. Push notifications? MMS? Tethering? Essentially useless on a device that relies on WiFi for a connection. iPod Touch users are essentially asked to pay for copy/paste, in-app purchases, and the ability to buy a segment of the latest apps from the app store.”

For more on Apple mobile OS usage:
- check out the Chitika website

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Mobile application downloads are expected to reach 5 billion in 2014, more than double 2009’s estimated 2.3 billion downloads, according to a new forecast issued by ABI Research. Citing growing smartphone adoption–sales grew 20 percent this year–as well as the proliferation of app stores behind the surge, ABI anticipates the iPhone will remain the leading platform for mobile software, although its share of the overall application market will contract during the latter stages of the forecast period–the forecast declares Android will benefit most from the upcoming boom, increasing from 11 percent of total application downloads this year to 23 percent five years from now. “This rapid growth is driven by the mass adoption of the Android OS by both vendors and consumers from 2009 onwards,” says ABI wireless research associate Bhavya Khanna in a prepared statement. “There are now more than 14 phones that run the Android OS, and many more will launch in 2010. This, coupled with the rollout of application stores from both smartphone vendors and network operators, will see the iPhone’s share of the total market shrink between 2010 and 2014.”

Despite growing consumer interest in mobile applications, ABI expects revenues from app sales will decline by 2013 as competition forces downward pressure on prices. Another trend to watch: An increase of free and advertiser-supported applications rivaling premium apps, typified by the launch of the free Google Maps Navigation turn-by-turn service.

For more on the ABI Research forecast:
- read this release

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