Android is Becoming a Problem

In 2012 more than half of the world's smartphones run Android and this week Google is slated to unveil Jelly Bean, its latest version of Android. With this release, the 4-year-old operating system has integrated most of its key products into Android. But Android's success is as much a fluke as anything . The software only took off when Verizon Wireless released the Motorola Droid in late 2009.

Google's mobile OS held a 59% share of the smartphone market as of last quarter, IDC analysts said. But according to IDC Android's market share peak is about to end at about 62% before slowly declining over the next five years, the research group predicted. Though Android is expected to remain dominant, IDC believes that competitors like the Apple and Microsoft will hurt Android's market share.

Google has cause to be nervous. Apple is no slouch. The iPhone accounted for almost half of Verizon's smartphone sales last quarter and more than three-quarters of AT&T's. But Apple is now coming at Android in the fast-growing prepaid market, where Google had long been the only smartphone player. And, Google's partners have new reasons to be upset. Google completed its acquisition of Motorola Mobility a month ago, putting it into direct competition with its partners.

Samsung's CEO, Kwon Oh-hyun, hinted last week that he would like Samsung to be more in control of its own destiny. In his inaugural speed to his staff, Kwon called for a focus on creating new customer experiences and on "strengthening soft capabilities in software, user experience, design, and solutions," according to a Wall Street Journal report.

The uncertainty Google faces in the smartphone space is nothing compared to the giant question mark surrounding its tablet initiative. The iPad will account for 62% of the world's tablets this year, IDC estimates, compared to 36% for Android. Software developers haven't embraced Google's tablet initiative. There are 225,000 apps specifically designed for the iPad, but there are so few tablet-specific apps for Android that Google doesn't make the number available. "[Apps] are key to tablet users, which is why we have not seen great hardware from Asus and Samsung sell in big volumes so far," said Carolina Milanesi, analyst at Gartner.

Google has tried to fix some of Android's problems. It developed a much more feature-rich and dynamic version of Android, called Ice Cream Sandwich, that works the same on tablets and smartphones. But only 7% of Android users are actually using ICS, six months after it was released to the public. Google will unveil Jelly Bean, the next version of Android, this week. But it won't matter if Android's rivals stop its momentum.