Droid Fever: Droid & Android Expected to Be a Big Success, Says iSuppli

Even industry analysts have gotten Droid Fever, iSuppli analysts suggest Droid could be the "Comeback Kid" for struggling Motorola. Their news release states, " Droid promises to reverse Motorola's fortunes in the cell-phone business."

Droid uses Google's Android Operating System (OS). Android is expected to account for only 2.4 percent of the total smart OS market in 2009. However, Android is expected to enjoy the fastest growth in usage of any of the smar-phone OSs, with shipments in 2013 rising at a Compound Annual Growth Rate (CAGR) of 118 percent from 2008. This will give Android a 9.1 percent share of the global smart-phone OS market in 2013, boosting it the No.-4 ranking, up from a last-place seventh ranking in 2008 and 2009.

There are many things contributing to Android's success. Android is licensed by seven key handset OEMs, including No.-2 Samsung, No.-3 LG, No.-4 Motorola and No.-5 Sony Ericsson. The OS also enjoys support from eight global wireless operators, the most among all the seven major operating systems vying for a share of the smart-phone market. In addition to Verizon, Android is supported by Sprint and T-Mobile in the United States, as well as by China Mobile in China.

A popular new feature in Android 2.0 is free turn-by-turn navigation, which is available on Motorola's Droid. This will make the device more compelling in the smartphone market and poses a major challenge to the Portable Navigation Device (PND) industry.

Reviewers  are raving over the Droid's touchscreen display, which uses capacitive touch technology following in the footsteps of Apple's iPhone. Shipments of capacitive touch-screen displays are expected to nearly quadruple from 2008 to 2013.

"Droid is potentially a game changer for Motorola," said Tina Teng, senior analyst, wireless communications for iSuppli. "Motorola now is no longer just emphasizing slick form factors, such as it did with its RAZR handset. The company now has focused on the hottest segment of the global mobile handset market--providing compelling smartphone products that are usable and expandable through third-party applications. Droid also has capitalized on the trend toward smart-phone widgets, which allow users to customize products according to their own personality."

Motorola's share of global cell-phone shipments has been sliding over the past three years. The company accounted for 5.4 percent of worldwide unit shipments in the second quarter of 2009, down from 22.5 percent in the second quarter of 2006. While mobile handset shipments grew by nearly 7 percent in the third quarter, Motorola suffered a disappointing 8.1 percent decline during the same period.

Motorola's ranking in the global cell phone business has declined in concert with its falling market share. The company in the third quarter of 2009 held the No.-5 rank worldwide, down from fourth place in the second quarter. As recently as the first quarter of 2007, the company was the world's second largest cell-phone shipper after Nokia.