This could be Android’s big break

Why:

• China Unicom reported only 5000 iPhones sold in the first week. This is in stark contrast to the 1 million new 3G subscribers it gained in total. Also, the iPhone App Store is not available, and neither is Wifi. This is a huge hit against the iPhone’s greatest strengths, apps and web browsing.
• Verizon just launched the Motorola Droid. The new phone is echoing around the blogosphere, leaving an impression as a true iPhone 3GS competitor, and in some ways, shows itself to be a superior product.
• Exclusivity with carriers in various countries creates a smartphone vacuum amongst the carriers that are not partnered with Apple. Android is steadily moving into these free spaces. In the US, these include Verizon and Sprint, among others.
• While yearly iterations on the iPhone platform have steadily improved Apple’s product, Android has nearly accomplished product parity in only two thirds the time.

Why Not:

• Android as a commercial platform for application developers is not currently as attractive as Apple’s solution. Google is trying to populate the store with higher quality applications through its Android Developer Challenges, but this also has the unpleasant side effect of temporarily suppressing the Android Market economy. Many of the high quality apps made for these challenges are released for free, wiping out revenues for entire application niches.
• Applications in the store seem to convert fewer buyers than their counterparts in the iPhone App Store.
• Piracy seems to be a more significant issue on Android, which might be a direct cause for the low conversion rates.

Niggles:

• The Droid camera autofocuses poorly, and the color processing is significantly more bland than that of the iPhone 3GS. However, this should be addressable with a software update.
• Applications can only be installed on the phone’s internal memory, which on the Droid, has an upper limit of 256MB. This means larger applications must install a small binary that will download the remainder of the application for installation on the removable memory.

Future Strategy

It’s very likely that the iPhone’s dominance will end in the near future if Android continues advancing at such a rapid clip. Apple is currently stuck in disadvantageous exclusivity contracts while its competition enjoys free roam among all other carriers. Apple’s saving grace is a superior application library and application discovery interface. If Android can revamp its approach to applications and find out where it can find its own iTunes-like foothold, things will start to get a bit more interesting.

Google stands to be the major winner if Android succeeds, even though it’s giving everything away for free. In the same manner Microsoft overtook Apple in the early days of Silicon Valley, Google stands to take over Apple in the mobile wars thanks to hardware independence and a strong foothold in personal online information. If Google releases a Sync application, perhaps within Google Desktop or Chrome, the stability of the foothold it could establish in competition with Apple will be tremendous. Currently, nearly everything on Android can be easily synchronized with Google’s services. However, a few strategic services remain unimplemented, such as media. In the same way Google Docs has displaced Microsoft’s Office in many small workplaces, Google could also displace iTunes using an online equivalent.