2010-06-30 17:14

While businesses like eBay's PayPal already offer in-app payment tools for Android developers, dealing with multiple companies increases the complexity, Rubin says. Since starting its in-app payment tool on May 19, PayPal has had more than 1,000 developers download it, says Osama Bedier, a vice-president at PayPal. Most of the developers came from China.

Helping Handset Makers Google is also helping handset makers like Huawei in China and LG in South Korea offer cheaper Android-based smartphones, Rubin said. Huawei, the biggest maker of wireless equipment for carriers in China, unveiled four Android phones and an Android-based tablet in February.

Smaller Chinese manufacturers, which make up about 10 percent of the global phone supply, are also adopting Android, seeking to gain share with lower-priced devices. Many of these manufacturers rely on Taiwan-based MediaTek, which supplies chips for ultra-cheap phones sold in Asia, Africa, and South America. The company has joined the Open Handset Alliance, the group that promotes Android, Google said. MediaTek-based devices may cost carriers as little as $70 apiece, said Carolina Milanesi, an analyst at Gartner. Today, the cheapest Android phones cost carriers about $200, while low-cost Symbian devices run about $170, she said.

As more lower-priced phones come to market, more carriers will offer the devices to consumers for free. That could boost the adoption of Android, especially in emerging markets like India and China. That adoption will give Android a leg up on Nokia. While the Espoo (Finland)-based company holds only a fraction of the US market, it is the leading phone maker globally. "As Android develops, the main vendor who is going to feel the pressure is Nokia," Milanesi says.

In the first quarter, more than 41 percent of smartphones shipped worldwide were powered by Symbian, the software used on most Nokia handsets. Almost 16 percent used Apple's operating system and 10 percent ran Android, according to consulting firm ABI Research in the US.

Nokia says it has the brand and products to maintain its market share in Europe and Asia. "Nokia has developed locally relevant solutions that consist of affordable mobile phones and applications, designed and built from the ground up to meet the specific needs of customers in emerging markets," spokeswoman Laurie Armstrong says.