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It looks like there will be 115 Google (NASDAQ:GOOG) Android phones on the market by the end of 2010 along with 50 non-phone Android devices. Many are touting recent market share gains as a victory for Android legitimacy in the smartphone market. ComScore reported that Android’s share of the US smartphone market jumped to 9% in February. Can Google put a dent in iPhone’s 67% mobile Web browsing market share?

The Android Market launched four months after Apple’s (NASDAQ:AAPL) App Store and has grown to provide 40,000 applications available for download (we haven’t heard any numbers specifying how many of these apps have actually been downloaded, hopefully we’ll hear something in the Google earnings call). Meanwhile Apple’s App Store has grown to provide over 185,000 applications with 4 billion downloads so far. As the 165 device Android army battles against the 3 device Apple empire (iPod Touch, iPhone, iPad) the question on investors minds is who will eventually triumph? Will Android follow in the market share footsteps of the open Microsoft (NASDAQ:MSFT) OS of the PC era? Or will Apple’s closed mobile ecosystem garner iPodesque market dominance? These are important questions to consider.

Future Android success is dependent on the following four factors:

1-Apple to remain exclusive with AT&T (NYSE:T). What would Android market share numbers look like if the iPhone was available at Verizon (NYSE:VZ), Sprint (NYSE:S), and T-Mobile? It can be argued that Apple’s decision to remain exclusive is the only thing keeping Android alive. The longer Apple drags their feet on a move to Verizon, the more entrenched Android will become. A large number of people refuse to join AT&T and are willing to use the next best smartphone alternative.

2-Google needs users to purchase apps from the Android store. This library of apps is what will create brand loyalty as consumers choose whether or not to remain with their Android device. Without loyalty, consumers will be quick to jump ship.

3-The 165 Android mobile devices need to generate enough revenue for the manufacturers to continue. The fragmented Android ecosystem is a terrible business model. Those 165 devices have to share the 9% piece of market share pie. Google is going to have to work hard to convince these partners to remain as nothing more than manufacturers caught up in a price war where their phones are nothing more than a commodity. In the Android ecosystem the opportunity of producing a one hit wonder does exist but it is likely to be short lived until the next Android offering comes along.

4-Google is going to need to figure out how developers can easily format their applications for the 165 devices that vary is size, shape, and function. Some are touchscreen. Others use a keyboard. Consumers will demand that the user experience be seamless.

As Google earnings are set to be released on Thursday, I expect the company to report better than expected numbers for their core business. With the economy in recovery, ad dollars should be flowing through Google at an impressive rate. But make no mistake, the future of Google is dependent on their mobile advertising strategy. They need this army of Android devices to pick up the pace.

The longer Apple stays away from Verizon, Sprint, and T-Mobile the better off Google will be. The longer Apple keeps Google as the default search in Apple World the better off Google will be. In many ways, their fate lies in the hands of Steve Jobs. Although it looks unlikely to happen, a June Verizon iPhone launch would crush Android. Should Steve Jobs be more concerned about revenue sharing details with Verizon or should he be more concerned about Android growth? Join us here to see how we are trading Google in the short run at earnings as well as the long run option LEAPS strategy. The wrong move at the wrong time could get you killed with Google. Volatility abounds.

Disclosure: Long aapl

Source: Four Ways Android Can Put a Dent in the iPhone