A Piper Jaffray report from last week predicts Google's (Nasdaq: GOOG ) Android operating system will control 23.2% of the smartphone market in 2012, with Apple (Nasdaq: AAPL ) accounting for 17.6%. In five years, Android will have over half the market, with Apple gobbling up 20%-30%.
Fool analyst Rex Moore says the big deal in the report is what this means for Nokia (NYSE: NOK ) and Research In Motion (Nasdaq: RIMM ) . There could be just 25% of the market left over for these two, as well as Microsoft's (Nasdaq: MSFT ) Windows Phone 7 when it finally launches. There's talk from Piper and others that Nokia and RIM will have to replace their operating systems and adopt Android -- or even Windows Phone 7 -- to stay relevant in the high-end market. Both seem resistant to that now, even though neither have a "core software competency," according to Piper.
Bottom line: At this stage it looks like Apple and Google are going to be the big winners in this space. Apple has plenty of room to grow, limited only by the number of iPhone converts it can corral. That will get a boost once the AT&T (NYSE: T ) exclusivity ends and another carrier like Verizon (NYSE: VZ ) has the iPhone. Google wins, of course, because of the mobile search advertising profits it pulls in regardless of the type of phone people buy. The interesting wild card here is Microsoft, and whether it might be able to lure Nokia or RIM to Windows Phone 7. But be careful, its track record in the mobile space is awful.
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