Analysis – Google’s mobile software platform turned 1 last week. However, even if Android was officially unveiled on November 5 last year, there is only one Android cellphone available at this time. While analysts are still trying to figure out just how successful Android’s G1 launch has been, we know that conquering the cellphone market is much more difficult now than it seemed to be the case last year. Nokia is preparing capable new phones, Apple has just become the world’s second largest smartphone publisher, while Blackberry maker RIM is still showing huge growth rates. Where is Android’s place?   

Compared to the launch of the iPhone, the introduction of Android and especially the G1 phone were much more subdued. And even if the G1 is sold out at most T-Mobile locations the success so far may be questionable, especially since we know that T-Mobile has just booked a 2-day, 1 billion page impression campaign with AOL’s advertising arm. Looking at Android overall, the first year may be considered rather underwhelming, at least in the light of the promises made by Google one year ago.

You could blame the limited success on the fragmented market and you would be right. You could also argue that Android's finest hour is yet to come and most likely, you would be right as well. Android's progress appears to be currently derailed by the market itself, a market that is fragmented into Windows Mobile, Blackberry, iPhone, Palm and Symbian devices. However, we know that software will ultimately determine the fate of a mobile platform, particularly the distribution system that allows users to easily browse and download third-party applications directly on the handset. And that may remain Google’s focus and big opportunity.

When Apple opened the floodgate with its App Store, Google was the first to follow with Android Market. Android now has big advantage over established players that will arrive late in the game with their own application stores, most notably RIM's Blackberry Storefront and Microsoft's Skymarket. Another key advantage is how exceptionally well Google executed Android's openness promise: There are no restrictions and developers can freely put their applications on Android Market without Google's approval. This was crucial to attract developers to Android.

Although Android Market features several dozens of different products, ranging from an application that addresses Android's lack of corporate Exchange syncing capabilities to the usual consumer crop like Imeem social music, Facebook, Twitter and IM clients, the offering is much less extensive than what the AppStore currently offers: More than 5000 applications. And Google has yet to enable paid applications.

Analysts: Android has a long way to go

Despite its fresh and open approach, analysts think that the mobile phone market may be a tough one to crack for Google. Jack Gold of J. Gold Associates believes that Android needs market share and enterprise market first and foremost. "Android has garnered much attention but much less market share so far," he told TG Daily. "It needs to expand beyond the one handset from HTC, which should happen late this year or early next year. It also must garner more interest from enterprise users, which require it to add more security and corporate email features, especially Exchange connectivity."

Gold is convinced that a poor business support makes Android very vulnerable. "Right now, our research tells us that less than 5% of enterprises have identified Android as a key platform they must support in the next couple of years," he said. "That does not bode well for its future, as enterprise users are a key constituent of higher end smart phones." Rivals mostly agree with analysts, especially one particular rival.

Read on the next page:  Microsoft: Android is not on our radar

Microsoft: Android is not on our radar

Speaking in front of investors invited by the Australian telecom giant Telstra last week, Microsoft's CEO Steve Ballmer said it is too early to tell if Android can challenge established players. The executive thinks that Android does not "bubble up to the top" of Windows Mobile competitors, citing Symbian, Apple and Blackberry as Microsoft's top competitors. Google isn’t quite there yet, at least according to Ballmer.

"I'm not saying they're not going to be a factor," he said. "Google might be a factor someday, but right now these competitors look a little tougher to me." Microsoft’s top executive also said he does not "really understand the business model" that should drive revenue. Unlike Microsoft, which licensees Windows Mobile to device makers, Google provides Android free of charge to carriers and device makers. Google even open-sourced Android, so anyone can modify and deploy Android on a royalty-free basis. However, we here at TG Daily don’t buy that Ballmer has not made the connection between Android and Google’s revenue source yet.

Google's business model: Mobile search and advertising

Being the world’s search monster, Google, of course, is interested in spreading its own mobile platform to take a huge chunk of the mobile search market, which estimated to grow to a volume of $715 million in 2011, or almost 15% of a the total mobile advertising market worth nearly $4.7 billion. With that in mind, Android is just a vehicle for Google to take mobile search and advertising. Ballmer also said he doubts carriers will fall for a royalty-free Android with built-in Google search, warning that operators can ask to be paid for search. He suggested Google is under no obligation to improve Android as it would have been if Android was a commercial product.

Android's future still gloomy

Still a newcomer, Android has to overcome big hurdles to stand a chance in the mobile world. Jack Gold thinks Android's key rival will be "Symbian, which is also going open source and already has a commanding lead in the smartphone market". The analyst added that Android must compete with the more established proprietary players like Apple, RIM and Microsoft, labeling. Gold believes that this will be a “daunting task”.

 "Android in and of itself won't assure success no matter how good it is as an OS," he said. "It will require multiple vendors offering compelling phones that users want to acquire for Android to achieve success and move outside its 'techie' niche."