BANG! Apple and Google are Lighting This Market Up

Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) already account for 80 percent of the world’s smartphone market together, but retain a scope for much larger growth. Of the about 1.4 billion phones sold this year, only about 35 percent will be smartphones, according to research and trading firm Wedge Partners. But this percentage is projected to climb to 75 percent in the next five years, giving the two leaders in the market a huge reason to plan their next onslaught.

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Apple is entering new markets with an attempt to corner a majority of the growth potential, as well as working on improving its iPhone and iPad devices and iOS software. It is also developing new software, such as its forthcoming in-house mapping app, to exert more control on the accompanying data. Google is also trying to bring about changes in its strategy and is working on at least partially adopting Apple’s integrated hardware and software model. It recently acquired Motorola Mobility, which makes devices that run on Google’s Android operating system, to serve this purpose.

Of course, both face several challenges in a fast-changing market with continuously evolving technology. Google’s Android software remains free, and the company does not earn much revenue from the sale of these devices just yet. It is trying to fix that by opening its own online store and is expected to enter the tablet hardware arena with the launch of its Android tablet made in collaboration with Asustek Computer. Apple faces pressure to sustain its massive growth over the past few years, and is experimenting with newer growth strategies such as offering the iPhone with prepaid wireless service.

The two companies are also competing hard against each other, with Apple getting rid of its long mapping association with Google as well as using its virtual assistant Siri to provide an alternative to the latter’s search.

In the first quarter of the year, Google’s Android accounted for 59 percent of global smartphone shipments, up from 36.1 percent a year earlier, while Apple had 23 percent, up from 18.3 percent. Smartphones running on Nokia’s (NYSE:NOK) Symbian software dropped to 6.8 percent from 26 percent, while the share of Research In Motion (NASDAQ:RIMM) fell to 6.4 percent from 13.6 percent. Nokia is also trying to make a fresh charge by incorporating software from Microsoft (NASDAQ:MSFT) into its new models. The real impact, though, is yet to be seen.

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