Google Inc displaced iPhone maker Apple Inc to become the second most popular provider of smartphone software in the United States during the first quarter, the latest sign of the increasing competition in the fast-growing mobile market.
But Google's success in becoming a leading mobile software player was tempered by the news on Monday that Google lost a key partner in a related effort to redefine the cell phone industry by selling phones directly to consumers through its website.
A Sprint representative said on Monday the company would no longer support the Nexus One, the sleek touchscreen smartphone developed by Google and HTC and sold directly on the Google website.
Smartphones featuring Google's Android operating system accounted for 28 percent of U.S. smartphone unit sales in the first quarter, according to NPD Group, behind top-ranked Research in Motion Ltd, maker of the Blackberry phone, which had a 36 percent share of the market.
Smartphones, which allow consumers to surf the Web, send email and run specialized applications on wide, color screens, are increasingly replacing no-frills cell phones for many U.S. consumers.
The devices have become a prime battleground for a variety of technology companies seeking to ensure a good position in the evolving market.
Last month, Hewlett-Packard Co said it would pay $1.2 billion to acquire Palm Inc, which sells two smartphone models based on its WebOS operating system. Microsoft Corp, whose Windows operating system is used in the majority of the world's PCs, unveiled a pair of smartphones last month and recently launched a revamped version of its mobile operating system.
Apple has sold more than 51 million iPhones since it launched the device to wide acclaim in 2007 and the company says more than 200,000 apps are available for the phone.
In the first quarter, Apple's iPhone, which is available exclusively on the AT&T wireless network in the United States, dropped to third place as its share of the smartphone operating system market remained flat quarter-over-quarter at 21 percent.
Unlike Apple, Google offers its Android software to other phone-makers. In April, Google said a dozen vendors currently offer 34 different devices that feature the Android software.
NPD analyst Ross Rubin said the strong showing of Android phones during the first quarter owed to promotions by Verizon Wireless, which he said has expanded its buy-one-get-one offer. Verizon Wireless is a venture of Verizon Communications Inc and Vodafone Group Plc.
As in the past, carrier distribution and promotion have played a crucial role in determining smartphone market share, Rubin said in a statement.
While the Android operating system is gaining momentum in the market, Google has had less luck with its Nexus One phone, the Android-based device it designed in close collaboration with HTC. Google sells directly to consumers from its website.
Sprint said the Nexus One would not be available on its wireless network because of the upcoming availability of the HTC EVO 4G phone, which also runs Google's Android software and is compatible with the next-generation high-speed networks Sprint offers in certain markets.
Sprint's decision to drop support for the Nexus One comes a few weeks after Google acknowledged a version of the phone that runs on the Verizon Wireless network was being scrapped. Google initially promised a version of the Nexus One for Verizon Wireless in the Spring.
In a report earlier this year, analytics firm Flurry estimated Google sold roughly 135,000 Nexus One phones in its first 74 days on the market, compared with the 1 million iPhones Apple sold in the same time frame when it released the device in 2007.
(Reporting by Alexei Oreskovic; editing by Steve Orlofsky and Andre Grenon)