The Android 1.5 challenge: Beat iPhone 3.0 and Palm Pre

The real winners may be consumers, with more choices and better prices

Version 1.5 of the Android platform will have new features sought by users and developers since the mobile operating system's first release, but none of the updated features appear to easily out-do top smartphones such as Apple Inc.'s iPhone.

So when the Android 1.5 ships on new hardware later this year from Samsung and possibly other manufacturers, the question will be how well the open-source Android and its primary backer, Google Inc., can compete against the soon-arriving iPhone 3.0 and the WebOS on the new Palm Pre, among other smartphones, analysts said.

"Google and the Android folks have a real challenge in the market on their hands," said Jack Gold, an analyst at J. Gold Associates. "They basically have to become more than equivalent to what's already out there."

With iPhone 3.0 and the Palm Pre coming in the next two months, Android 1.5's full release as an over-the-air update to the T-Mobile G1 in the same time frame will ignite a "real battle like we've not seen for smartphones," Gold added.

He predicted the competitive environment will lead to price wars and battles by manufacturers and carriers to out-do each other on smartphone features. "The real winners will be consumers."

Google announced on Monday an early look at the SDK for Android 1.5 that includes support for soft keyboards, including from third parties, live folders, speech recognition and widgets for the home screen. The final SDK is expected later this month, and Android 1.5 will be available over the air to the G1 smartphone soon thereafter.

But Gold and other analysts said that some of those new features are already available in almost all other smartphones. "Voice command and touch are critical for Android phones, because almost everybody else has that already," Gold said.

Rob Enderle, an analyst at Enderle Group, and Ken Dulaney, an analyst at Gartner Inc., both said that the first version of the open operating system, released on the T-Mobile G1 phone made by HTC last fall, probably should have included what's being announced in Android 1.5.

"Android 1.5 is a lot of fixes that probably should have been in the first release," Dulaney said. "Overall, it's a nice improvement, a necessary upgrade, but a bit late."

Enderle said he always considered last year's first release "really, honestly, a beta" of Android. "So 1.5 improves usability and performance with some features, and this one will be the full-on first release," he said.

Despite the initial excitement last year over the Android operating system and its backing by heavyweight Google, the analysts agreed that ultimately what matters most to buyers is the hardware and the full user experience, and not so much whether it is open source.

Whether Android, because it is open source, helps developers work more easily with manufacturers does not translate into whether the manufacturers are producing phones that have the right look and feel and functions that buyers want to buy, Gold said.

"At the end of the day, the market buys the hardware, not the OS," Enderle said. "You can have a great user interface and all that, but at the end of the day, hardware really matters." Gold added, however, that users don't buy an OS as much as the "total user experience" and not just the hardware.

Samsung has said it will have three Android phones out this year, while LG Electronics, Motorola Inc. and Sony Ericsson have said they back the platform but have not committed to shipment deadlines.

"Now we have to wait on compelling hardware designs," Dulaney added. "The first designs by HTC were not as magical as the iPhone."

Enderle gave credit to Google and the Android movement for working to support the open-source community of developers building applications and improvements for Android. "They have been competitive to Apple's support for developers," he said. "Ultimately, Android will do well if people like the hardware."

Regarding the hardware, Gold said Android and Google need to find a sweet spot in the market, perhaps in between low-end cell phones and high-end smartphones, where there aren't many products. But in the next year, he said Android will probably sell on everything from $99 phones to $399 phones, as manufacturers figure out which market works best.

In the long term, Gold also said Android's success could depend on how much control Google keeps over the operating system. "If Android is true open source, then Google has to give up more control," he said.

Copyright © 2009 IDG Communications, Inc.

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