Android App Downloads Surpass iOS App Downloads For the First Time

Android has taken the lead in application market downloads, according to reports by by market analysts. This is the first time for the platform to overtake iOS, although Apple still trumps Google in terms of revenue and per-user downloads

ABI Research recently revealed market findings during the 2nd quarter of 2011. According to the analysts, Android Market downloads have surpassed those of Apple’s App Store. During that period, Android got a 44% market share in app downloads, while Apple’s share slid to 31%.

ABI credits this trend to Google’s open approach to Android and application development, citing how the platform is open for use by multiple manufacturers, while Apple’s iOS is a closed ecosystem. Also, quarterly shipment figures point toward a decline in iPhone sales during 2Q 2011, with a 9% shipment growth compared to 15% in the previous quarter. Meanwhile, Android smartphone shipments grew 36% compared to 20% in Q1 2011.

However, ABI qualifies this trend, saying that Apple is not exactly a net loser. In terms of per-user downloads, iOS users still outnumber Android users in average, by a factor of 2-to-1. iOS is said to be a better ecosystem for developers and users. ABI attributes this to better monetization for developers and a better user experience for smartphone users. As such, Android may be overtaking iOS in terms of raw numbers, but Apple’s winning strategy is focusing its market on getting the most out of each user and out of each application.

ABI’s Mobile Applications Market Data research says the global app market is expected to reach 29 billion app downloads by end of the year, compared to 2010′s 9 billion. Meanwhile, the total smartphone install base is expected to grow 46% compared to last year’s.

BlackBerry's business problem

Addictions are tough to break, yet Research in Motion seems to be doing whatever it can to help users cast aside their CrackBerrys once and for all. Consider just a few of the reasons the Canadian maker of the BlackBerry smartphone is ailing: an international outage in mid-October; the Playbook tablet, a weak answer to the iPad; and phones with web browsing that is both laughably low-quality and slow as molasses.

All of these woes mean that RIM (RIMM) faces its greatest existential crisis yet. At a time when its product lineup and network service have never been weaker, Apple (AAPL) and Android users are fiercely attacking BlackBerry's greatest strength -- the business market. Sure, BlackBerry had its moment of hipness, when advertising built around the likes of U2's Bono helped convince kids its smartphones were cool. But "the enterprise" was always RIM's sweet spot. Selling functional e-mail devices with a proprietary -- and secure -- network is where BlackBerry has excelled. That's why its three-day service outage was such a black eye.

For a while now BlackBerry has lagged in the kind of applications that make iPhones and Android devices so popular. And recently Apple has been highlighting business applications like Dropbox and Cisco's (CSCO) WebEx in its iPhone advertising. Though Apple focuses on consumers, it frequently notes that 93% of the Fortune 500 is testing or has already deployed the iPhone -- a terrifying statistic for RIM.

Meet the top 7 app makers of 2011

At the same time Motorola (MMI), which Google (GOOG) is buying, suggests its new Droid RAZR will sell well to chief information officer buyers, who value its inexpensive but high-quality "cloud" capabilities. The cloud lets users access content on networks businesses don't have to maintain themselves. "CIOs today understand there is a shift in IT to cloud and mobilization, whether they like it or not," says Motorola Mobility CEO Sanjay Jha.

RIM still has plenty going for it. Peter Walker, the company's senior director for enterprise product management, trumpets the "BlackBerry Balance" technology, for example, which lets business customers control employees' devices while enabling the use of personal apps. It is also beefing up its offerings from independent app developers. A bevy of new phones and tablets built around a redesigned operating system is expected next year.

Most important, the company still has 70 million worldwide subscribers, and shipped some 10.6 million smartphones last quarter. "A whole lot of businesses remain BlackBerry loyalists," says Kevin Restivo, a Toronto-based analyst with market tracker IDC. He says RIM is still strong for businesses where compliance matters, like law firms. Still, he notes, "enterprise is not the exclusive domain of RIM anymore." The problem with this narcotic, it seems, is that there are many suitable replacements.

--Reporter associate Richard Nieva, This article is from the November 21, 2011 issue of Fortune.