[telecom] Google, Apple Tighten Grip on Smartphone Market

Google, Apple Tighten Grip on Smartphone Market

By JESSICA E. VASCELLARO And AMIR EFRATI June 18, 2012

Apple Inc. and Google Inc. have brought mobile giants Nokia Corp. and Research In Motion Ltd. to their knees and captured more than 80% of the world's smartphone market. Now they are going after the rest.

Apple is marching into new markets-most recently U.S. prepaid mobile phones-to continue the growth of its iPhone and iPad devices and iOS software.

At the same time, the Cupertino, Calif., company is developing software, such as mapping, that it once obtained from Google to make its devices stand out and to control some features more tightly.

Google is shifting gears with its Android software to exert greater control over its destiny. In the past, Google relied on hardware manufacturers to build Android devices and on carriers and other retailers to sell them to consumers.

Today, Google is partly adopting Apple's integrated model by manufacturing some devices on its own and it plans to sell several devices directly with big marketing campaigns.

What's behind these moves? Apple and Google see bigger gains ahead. Of the about 1.4 billion phones sold this year, only about 35% will be smartphones, a percentage projected to climb to 75% in the next five years, according to research and trading firm Wedge Partners. That potential bounty is intensifying the fight to sell more devices and accompanying services.

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