NEW YORK ( TheStreet) -- As the smartphone war rages on between Google's ( GOOG) Android and Apple's ( AAPL) 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.

Developers' Preference Shift

While Apple remains the dominant player in the app space, some developers are beginning to turn to Android as a way of boosting their customer base.

Android's installed base could overtake iPhone in as little as five quarters, according to Bernstein Research analyst Toni Sacconagh. That's partly because Android is available through multiple large carriers, while the iPhone sells just through one carrier in many countries.

"People hype 'social gaming,' but if you can't reach all consumers, your game is not very social," said Niccolo de Masi, CEO of Glu Mobile ( GLUU), which, like the makers of Angry Birds (above), develops games for both iPhone and Android devices. "We think the opportunities for really big scale come from reaching billions of people, not hundreds of millions of people."

Likewise, New York-based online investing platform Kapitall will first release its mobile application on the iPhone as a way to test the market -- before it launches on Android. The iPhone platform is more significant to Kapitall because of the sheer number of users that will have access to it.

"We're going with the iPhone first as way to implement feedback to make a better Android app that targets a wider market," said CEO Gaspard de Druezy.

Coming of the Gaming Giants

Large game publishers are also increasing their interest in Android.

Electronic Arts ( ERTS) offers only a few games for the Android platform, compared to the more than 50 or so for the iPhone, but it has mentioned expansion plans. The Redwood Shores, California-based video game company views Android as an important piece of its future and is looking at positioning its mobile business to break into this market, Chief Financial Officer Eric Brown said recently at the Deutsche Bank 2010 Technology Conference.

Brown noted, however, that Android needs a more streamlined, centralized app store to successfully compete with Apple. Android's games can be downloaded from multiple independent software stores -- as well as Google's own Android Marketplace.

Some developers, however, don't yet buy that Android is the mobile platform to bet on, citing a cumbersome checkout process through Google Checkout, frustration getting games noticed on the Android Marketplace and difficulty getting paid for apps.

"We're still pretty focused on the Apple platform and I don't see this shifting anytime soon," said Ashish Toshniwal, CEO of San Francisco-based mobile app design and development company Y Media Labs, who estimates that he designs 80% of his apps for the iPhone. "iPhone is still the number one platform that clients want to launch."

In terms of aesthetics, the Android platform has a "geekier, less consumer focus" when compared to Apple's, a fact that may also turn off some developers, said mobile entrepreneur Maria Seidman. Seidman said she is focusing on app development exclusively for Apple's iOS platform. She is still not swayed by Android.

Not yet, anyway.

--Written by Olivia Oran in New York.

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