Android Outsells iPhone: Should You Wait to Buy a Smart Phone?

(MoneyWatch)  The earth moved under the mobile market in the first quarter, with smart phones using Google's Android operating system significantly outselling iPhones, according to figures from NPD Group, a market research firm. Android phones took 28 percent of market share, while Apple took 21 percent. (RIM's BlackBerry continued to dominate the category, with 36 percent.)

That's a big deal and a big jump; six months ago, all of the phones running Google's Android operating system made up just 3 percent of the market.

If Google wants to thank anybody, it should thank Verizon. The carrier spent the first quarter promoting Android-operating phones, including the Motorola Droid and the HTC Droid Eris, with a buy-one-get-one-offer. But there's another reason why Verizon might be having a big influence on those smart phone decisions. It's widely praised for having the best and most stable coverage. In contrast, there's the AT&T network, which "supports" my iPhone in a so-far exclusive relationship. Let's just say that using the actual phone can be the least fun part of the iPhone experience because of missed, blocked, and dropped calls.

The smart phone market is likely to stay wide open for a while. Apple is rumored to be releasing a Verizon-compatible iPhone this summer and Microsoft will be putting out its heralded (at least by Microsoft) Windows Phone 7 operating system later this year. And HP didn't spend $1.2 billion on Palm if it wasn't going to put its (in my opinion, most excellent) contact and calendar management systems into its own smarter-than-thou phone.

So, expect a crowded market. Anyone who is looking to upgrade their phone might want to wait one more quarter to see how things develop. But here are some predictions:

• All that competition will make the phones increasingly better, and increasingly cheaper.
• You'll be able to do pretty much anything on any of the smart phones, so it will come down to a matter of preferred style and carrier.
• The network service, on the other hand, will keep getting more expensive.
• Similarly, the apps that are really useful will start to get pricier. The fun-but-unnecessary ones will continue to be ad-stuffed.
• Apple will include something cool on the next iPhone that was (accidentally on purpose?) not included in that model the hapless engineer (accidentally on purpose?) left in the bar.

Photo by Closari on Flickr.
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