1. As everyone expected, mobile web growth is exploding: 9.5 million people in the U.S. owned smartphones during the three months ending in February 2011, up 13 percent from the preceding three-month period.
2. Google Android is crushing Apple: Google Android's market share grew 7.0 percentage points since November, strengthening its No. 1 position with 33.0 percent market share. Research In Motion
Apple is falling behind Google's Android. And if you're bullish on Apple, these trends should raise a big red flag.
"The Android gains matter because technology platform markets tend to standardize around a single dominant platform (see Windows in PCs, Facebook in social, Google in search)," writes tech analyst Henry Blodget.
"And the more dominant the platform becomes, the more valuable it becomes and the harder it becomes to dislodge. The network effect kicks in, and developers building products designed to work with the platform devote more and more of their energy to the platform. The reward for building and working with other platforms, meanwhile, drops, and gradually developers stop developing for them."
The Big Idea: It's not a question of which platform is "better." It's a question of which platform everyone else uses. And increasingly, in the smartphone market, barring a radical change in trend, that's Android.
"So that's why Android's gains matter," concludes Blodget. "And, yes, Apple fans should be scared to death about them."
Of course, Apple bulls might argue that the company has an insurmountable hold on the "premium" segment of the mobile market, and that it doesn't matter who has the majority -- do institutional investors agree?
To find out, we crunched data on institutional money flows (data sourced from Fidelity). Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. Google: Google is the company behind the Android operating system. Institutional investors appear to be optimistic on the company's mobile strategy -- they have been net purchasers for two consecutive quarters (net buyers of 1.6M shares in the previous quarter, and net buyers of 5.2M shares in the current quarter). For some perspective, 5.2M shares represent about 2.1% of Google's total float.
2. Apple: Despite the recent market share gains of Google's Android operating systemm, Apple's iPhone is still the gold standard in smartphone technology. Some analysts have suggested that Apple's delay of the next iPhone -- the iPhone 5 -- has opened the door a crack for Android (and even Research In Motion and Microsoft) to regain some ground in the mobile wars. Institutional investors seem slightly worried -- during the current quarter, they've been net sellers of 4.2M Apple shares, which represent about 0.5% of the company's total float.
3. Research In Motion: Can the BlackBerry keep up with Apple and Android? Institutional investors don't think so -- during the previous quarter, they were net sellers of 44.7M shares (represents a whopping 9.6% of the company's total float). It's worth pointing out that the extreme pessimism seems to have dissipated during the current quarter, with institutions reporting net buys of about 4.3M shares. But is it too little too late?
Summary: The Apple / Google battle is heating up, and institutional investors seem to be banking on wider adoption of the Android platform. Research In Motion has been dragged down by extreme pessimism, but is this warranted when you consider the possibility of an iPhone 5 delay?
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.
Kapitall's Eben Esterhuizen does not own shares of any companies mentioned.