It's very clear that Google's Android operating platform (promoted as "Droid" by Verizon) is gaining a lot of market share in the smartphone market in the United States. Why are Android-based devices doing so well? Google's business model for Android is very different from Apple, and yet, both firms are growing in market share.
In addition, the market is about to become even more crowded over the coming months. Microsoft will be introducing Windows Phone 7. HP/Palm is likely to introduce their next-generation handset. Sony Ericsson just announced a new corporate headquarters in Atlanta and the launch of the Xperia X10. Also, Nokia just hired Stephen Elop from Microsoft as their new CEO. As Dick Enberg, the well-known sports broadcaster, might say in this situation: "Oh my!"
Android is an open-source operating environment developed by Google. Their business model is to make the source code available to anyone. Handset manufacturers then take the Android base operating system code and add their own features and functionality (plus specific requests made by the operator) to then launch their handsets into the market. This is in stark contrast to the PC world in which operating system software such as Windows is built by Microsoft but licensed for a fee per unit to the PC manufacturer. Every single PC customer has the same user experience. Applications are then sold on top of Windows to provide additional functionality to users.
Apple goes about it very differently. They own the operating system and tightly integrate it to the hardware. The code is kept proprietarily by Apple, thus creating a "walled garden." Apple then enables developers to build applications on top of their closed operating environment for both notebooks (Mac OS) and the iPhone (iOS). The notebook applications are sold through retail and over the Web, whereas Apple controls the distribution of iPhone (and iPad and iPod touch) applications through the on-device Apps Store.
Google is getting device manufacturers such as Motorola, Samsung, HTC, LG and ZTE to use Android in their wireless handsets (and, soon, in their tablets as well). They are gaining converts because they have built a very good multitasking operating environment and are continuing to improve it. This approach provides a low cost of entry for handset manufacturers. It also allows the manufacturers to add software to the Android environment so that there's a different user experience with each model that comes to market.