Android’s Gaining Fast, So What Can Apple And RIM Do To Compete?

We’ve all heard the prediction that 2011 will be “the” year for Android, with more devices — handsets and tablets — based on the OS hitting the market than ever before, and more apps developed for the platform (estimated now to be at 210,000 and counting). And if the last six months are anything to go by, in the U.S., Android is well on the way to being the dominating force in smartphones, unless Apple (NSDQ: AAPL) or RIM (NSDQ: RIMM) pull something radical off in the months ahead.

Some figures out today from Nielsen indicate that in the last six months, there were more Android devices purchased in the U.S. than devices based on any other smartphone platform. Taking the three dominant platforms of Apple’s iOS, RIM, and Android, the three were virtually neck-and-neck back in July. But while Google’s Android shot ahead in subsequent months, the other two actually saw declines:

Apple’s breakaway lead, which it picked up in previous years of growth, appears to be just enough for it to keep its leading position of 28.6 percent market share, compared to Android’s 25.8 percent.

But while it appears that Android is trailing behind RIM, Nielsen points out that RIM is in fact effectively in a statistical dead-heat with both Android and Apple’s iOS in a race that is too close to call. As with the previous graphic, the key thing is Android’s upward path, versus the flat/declining growth of the other two:

Looked at one way, these numbers are a testament to Android’s business model — executed so successfully by Microsoft (NSDQ: MSFT) in the PC world — of achieving ubiquity by creating a user-friendly OS and then putting it into as many devices as possible.

Looked at in another way, it’s a clear sign that if RIM and Apple do not want to lose more ground to Android, they will need to do something different from what they are doing now.

In RIM’s case, the PlayBook tablet is what everyone has been anticipating and could be just the thing to reassert RIM’s standing in the next generation of devices. In Apple’s case, it may well be starting to offer the iPhone with other carriers besides AT&T (NYSE: T) (not just Verizon, but the rest, too, as it does in other countries).

Both might also consider how and if they should try to develop devices at different price points, as Apple does with its iPod music players, to compete against the sub-$100 handsets in the Android portfolio.

This idea of a low-end smartphone will be key as more feature phone buyers tip into the smartphone camp. Nielsen says that in November, some 31 percent of consumers were still opting for feature phones:

Meanwhile, just as Android is filling out the lower end of the handset market, so too is it looking to make its mark on high-end devices: Verizon has been teasing out news about LTE devices, promising more details later this week at the Consumer Electronics Show in Las Vegas. Those devices will almost certainly be more examples of Android-based innovation, and another parcel secured in the OS land-grab.