Google's Android mobile phone system is building momentum, beating Microsoft in the last quarter and challenging Apple as the number of new models with software and compatible applications grow.
Google's Android was the fourth most popular operating system on smartphones sold in the first quarter, research firm Gartner said on Wednesday, putting the company in a good position as handsets look set to surpass computers for browsing the Web.
Android, which was in 10 per cent of smartphones sold in the quarter, lags Nokia's Symbian, Research in Motion and Apple.
Gartner said Android was due to beat Apple soon as there were more handset makers using its operating system, and Android phones were already outselling the iPhone in North America.
Earlier this month, research group NPD said smartphones running on Android accounted for 28 per cent of US unit sales in the first quarter, ahead of the iPhone -- data Apple publicly questioned, saying it was based on a limited sample of consumers.
Gartner's data is considered an industry standard.
Developer boom for Android
More and more start-ups are developing applications for Google's Android software, boosting interest among consumers and posing increasing risk to Apple, venture capitalists told the Reuters Global Technology Summit in San Francisco.
While Apple's app store offers more than 200,000 games, tools and other software to jazz up the iPhone, against just 38,000 for Android, the openness of Google's mobile operating system is helping it gain popularity with developers.
"I am quite impressed by the traction the Android ecosystem is getting," said Chris Moore, a partner with Redpoint Ventures, which has invested in online video store Netflix and IAC/InterActiveCorp's Ask.com.
Moore told the Reuters Global Technology Summit it felt as if as many start-ups were walking into his office to pitch Android applications as those for the iPhone.
"I want to say that on the current trajectory, they (Android) will pass the iPhone platform, or at least reach parity by the end of this year or middle of next year."
Venture capitalists in Silicon Valley are watching these trendlines very closely as they place bets on start-ups developing interesting mobile apps.
App developers usually choose a limited number of mobile platforms to write software for as every additional platform raises sharply their costs.
Microsoft, which has been making mobile software for around 10 years, hopes to claw back market share it has lost to rivals with new Windows Phone 7 models, due to reach markets in time for holiday-sales at the end of the year.
"We continue to see pressure for Microsoft. We expect to see difficulties also with Windows Phone 7 with limitations they are putting on hardware vendors," Gartner's Milanesi said.
Aiming to better battle against iPhone Microsoft has set high technical demands for handset models due to use its software.
Handset makers such as HTC, Samsung and Motorola all make Windows phones but are increasingly turning to Android, which is not only free but attracting a fast-growing developer community.
Microsoft is the only major phone software maker to charge a licence fee to handset makers.