iPhone 5 will not be saying 'Hi' to the world at Apple Worldwide Developers Conference (WWDC) 2011 today but it may turn out to be Apple's best bet yet against Android range of smartphones, thanks to iCloud and iOS 5.

Apple may be the biggest technology company in the world but when it comes to smartphones, Androids are outselling iPhones.

The company has been facing a huge challenge from Android smartphones lately. According to a comScore report, the market share of Google's Android surged to 36.4 percent while Apple's IPhone dropped down to second place with 26 percent market share or barely ahead of RIM's BlackBerry (25.7 percent).

In terms of mobile phone sales in the U.S., Apple ranks No.4 (8.3 percent) behind Android smartphone makers like Samsung (24.5 percent), LG (21 percent) and Motorola (15.6 percent).

A Nielsen survey also reveals that Android users download more apps on average than iPhone users despite Apple's App Store being more than twice bigger than Android Market Place.

Market analysts have attributed the fall in market share to various reasons, including Apple's stubborn decision to say no to Adobe Flash and the antennagate issue that marred iPhone 4's success.

Even as RIM is breathing down Apple's neck, Android threatens to break away from the pack with the launch of superphones such as LG Optimus 2X (the first Android phone with 1GHz dual-core processor) and Samsung Galaxy S II and HTC Sensation 4G.

Other Android smartphones lined up for launch and expected to give iPhone a run for its money are HTC Evo 3D, the Motorola XPRT, the Motorola Titanium, Samsung Gravity Smart and Samsung Exhibit 4G.

All the three smartphones sport an 8MP camera, which can record 1080p HD videos @ 24fps, run on the latest Android 2.3 OS, promise a sleek UI, and boasts of a humongous display that makes the current iPhone display look like a dwarf.

However, Apple hasn't given up the fight yet. And why should it? After all, the company's iPhone had set the benchmark in the smartphone industry for rivals to follow.

And, this time Apple has armed itself to the teeth with iOS 5 and iCloud, which will be presented at the WWDC 2011.

Read related article: WWDC 2011: Will Apple iCloud and iOS 5 mark Steve Jobs' inevitable return?

iPhone 5 is not expected to boast of hardware upgrades but iOS 5 and iCloud could be the magic tonic iPhone needs to catch-up with Android or even race ahead of its rival.

According to JMP analyst Alex Gauna, Apple is in a unique position to shock and awe the world with enhancements, extensions and harmonization of iOS 5 and iCloud and their release at the WWDC could be much more revolutionary than the launch of a fifth-generation iPhone itself.

 How iCloud can help iPhone beat Android

Apple has already embarked on what could be the largest data center in the world in Maiden, North Carolina in recent months and the half a million square feet center, which is expected to go live this spring, could give Apple a massive headstart in cloud computing industry.

Moreover, the company has already inked licensing deals with four major record labels - Universal, Warner Music Group Corp., Sony Corp.'s Music Entertainment and EMI Group - that will allow its customers to stream a wide array of music. On the other hand, though rival Google has a similar service, it does not have licensing deals with the music companies.

iCloud has another advantage over Google's Music Beta digital locker or Amazon's Cloud Drive - whereas in case of Google's or Amazon's offering, users would need to upload their songs, Apple's iCloud will be able to scan a user's library and make mirror copies available instantly.

This is in fact a major draw as it will not only boost iTunes sales but also could wean away Android users in coming days.

RBC's Mike Abramsky feels Apple's rivals will have a hard time beating iCloud as Apple's licensing relationships and 'controlled' platform may appeal to studios/publishers seeking to minimize piracy, while protecting their economics in a hosted model.

iCloud may also be differentiated via Apple's trademark user experience for convenience, simplicity, and discoverability, Abramsky said to his clients.

According to nextiphonenews.com, iCloud will allow users to exploit and take advantage of streaming both music and video and get the digital locker service which will be a big step forward for iPhone users.

Apple’s cloud service iCloud is expected to be free in the beginning but later users may be charged $25 annual subscription fee, according to LA Times. It will be offered through iCloud.com.

In comparison, Amazon, which set the industry standard when it released its cloud service, is giving away 5 GB of free storage, which can go up to 20 GB with the purchase of one mp3 album. Beyond the 20 GB, storage space can be bought in blocks of 50GB, 100GB, 200GB, 500GB, and 1,000GB, with each 1 GB costing $1. Thus, you get 1,000 GB for $1,000.

 How iOS 5 can help iPhone beat Android

iOS 5, the latest version of Apple's mobile operating system, will be launched at the WWDC 2011.

If reports are to be believed, iOS 5 will not only have Twitter integration that goes beyond basic features like photo sharing and sending tweets but it will also include a better navigation system, automatic sync system that runs on background, easier file organizing system, near-field communication (NFC), and some widgets on unlock screen to name a few.

Other expected iOS 5 features are genuine multitasking, faster over-the-air updates, revamped notifications capabilities, better emailing system, enhanced widget capabilities and better speech recognition features.

 Conclusion

However, iPhone 5 doesn't need to depend on software upgrades or Apple services to take the battle to the Android.

iPhone 5, reports say, will be a smartphone on steroids compared to iPhone 4 as it will come with 8 MP camera, A5 processor, a 4-inch display, 1080p output, curved glass screen, a SIM-less design, 3-4 internal antennas for both GSM and CDMA networks and 4G connectivity.

But beating Android won't be easy.

Android smartphones like Samsung Galaxy S II, HTC Thunderbolt and Sensation are sporting 8MP camera as well as dual-core chips, even as 4-inch display, curved glass design and 4G connectivity are also not uncommon features among Android smartphones.

iOS 5 is also going to face stiff competition from Google's next version of Android OS (code named Ice Cream Sandwich), which will incorporate the best features in tablet specific OS Honeycomb and smartphone OS Gingerbread. It will bring features like face-tracking, camera focus and voice recognition to the existing OS.

Moreover, Google has also stolen a march ahead of Apple by releasing its NFC-enabled mobile payment platform, Google Wallet, which enables users to make payments at the point-of-sale (POS) by merely tapping the phone.

And, by doing so, Google has raised the bar forApple and iPhone 5.

Does iCloud and iOS 5 have what it takes iPhone 5 to beat Android? Apple fans sure hopes so.

But a DigiTimes report is skeptical.

With more Android-based devices hitting store shelves in the second half of 2011, the Google smartphone OS will further widen its gap with iOS thanks to its more complete ecosystem a report points out.

In conclusion, if Apple is planning to beat Android, iOS 5 should include groundbreaking updates. iCloud alone cannot help iPhone beat Android. And, neither can Jobs' showmanship.

Apple's WWDC will take place from June 6 to June 10.