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Apple iOS 4 vs. Android: Developer Wars

NEW YORK ( TheStreet) -- As the smartphone war rages on between Google's (GOOG - Get Report) Android and Apple's (AAPL - Get Report) iOS, so does the race to provide users with the best, most popular apps.

Google gained some traction earlier this week when its Android Marketplace hit the 100,000-app milestone, but that's still significantly less than the some 300,000 available in Apple's App Store.

(A new entrant into the race, Microsoft's (MSFT) Windows Phone 7, boasts 1,000 apps.)

While analysts at IDC predict that Android's global market share will rise to 25% in four years versus Apple's, which will drop to 11% from 15% today, it's hard to imagine a system that could overtake Apple. Apple and its products are set apart from the rest, with their air of exclusivity and a certain so-called "coolness factor."

Part of Apple's iOS success has to do with the quality and variety of apps available on its platform. "Apps are a very big differentiating factor [for smartphones]," said Vijay Rakesh, an analyst at Sterne, Agee & Leach, noting that a high volume of appealing apps can help sway a customer toward one phone over another.

Apple's recent announcement that it will add an App store to its new Macs should create a seamless transition between iPhones and iPads, Rakesh said, enabling stickiness between the two that will make it difficult to wean customers off its products.

While the App Store itself is not hugely profitable for Apple -- it barely breaks even, Chief Financial Peter Oppenheimer has said -- it is designed to drive customers to the iPhone.

In addition, the purchase of apps over mobile networks ensures that iPhone users will sign up for high data usage plans, Barclays Capital analyst Benjamin Reitzes wrote in a recent note. This leads to high subsidities from carriers, and subsequently, high margins for Apple.

Google's Android Marketplace does not benefit from an increase in data usage, which is instead captured by its handset and carrier partners.
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