Google (GOOG) recently announced that there are now more than 300,000 Android phones activated every day.  This means that Android’s share in the smartphone OS market could increase at a faster rate and threaten competitors like Nokia (NOK) Symbian, Apple (AAPL) iOS and Research in Motion (RIMM) BlackBerry OS market share.
Higher Android adoption would benefit Google by enabling more mobile searches from Google’s platform as Google search is the default search engine on Android phones. Google already leads the search market with a share of around 68% while competitors Yahoo (YHOO) and Microsoft (MSFT) are way behind Google. Google Search constitutes around 70% of the $632 Trefis price estimate for Google’s stock, which is about 6% higher than the current market price.
Android Popularity Leads to More Google Searches
If Google’s claims of 300,000 Android activations per day are true, it could mean 27 million Android activations for a quarter. In Q3 2010, Android had about 20 million activations with a share of around 25% in the smartphone OS market.  This share has grown at a fast pace in the past one year from under 4% in Q3 2009.
With 27 million activations per quarter, Google is bound to gain more market share in Q4 2010 and beyond. Google search is the default search engine on Android phones and so Google’s search market share should benefit from the rapid adoption of Android. Mobile search is becoming important for Google and in another article we discussed how Android adoption and other driving factors could create upside to Google stock.
Google has increased its search market share in the past from around 61% in 2007 to 68% in 2010, and we expect it to continue to increase to around 72% by the end of Trefis forecast period. However, there could be an upside of 8% to our estimate for Google stock if rapid Android activations’ growth means that its search market share increases at a faster rate to reach 80% by the end of Trefis forecast period.
- "More than 300,000 Android activations each day," Wall Street Journal, December 2010
- Mobile Phone market report, Gartner, November 2010
Disclosure: No position