Google's Android Getting Better, iPhone Still On Top

Google (GOOG) is making some long-anticipated improvements to its Android mobile software this month. Good move, of course, but Google needs to keep cranking: Apple is still ahead, and is making big improvements to the iPhone, too.

Google announced this week that it’s adding virtual, on-screen keyboard support to Android in a software update. That will be helpful, as it should allow Google’s partners to more easily sell iPhone-looking phones without physical keyboards. (Or use virtual keyboards as backups.)

And other features sound nice, too: Android is also supporting home-screen widgets, speech recognition, and other features that developers and handset companies can use for Android apps and phones. The features — part of the Android 1.5 release — are now available for testing and will be rolled out in a more finalised format by the end of April.

But while solid improvements, we don’t see anything here that will get developers excited about Android yet. That will require greater market share, more than anything. And in the meantime, rival Apple is getting ready to launch iPhone 3.0 in June, which will make its impressive mobile platform even better.

Beyond adding a few things that Android has had since last year — such as copy-and-paste and potentially a digital compass — Apple is adding important new commerce and programming features to the iPhone. And Apple is opening an entirely new market to hardware accessory manufacturers, who will be able to build other gadgets that plug in and work with the iPhone. That should continue to give Apple an advantage over rivals like Google, BlackBerry maker RIM (RIMM), and Microsoft (MSFT).

But there’s still plenty of opportunity left for Android. Specifically, if companies like Motorola use it as the basis for mass-market phones, and not just expensive smartphones, Google could quickly get a larger install base. That could get developers more excited about writing apps for Android. And that, in turn, could make Android stronger versus the iPhone. But that’s not happening yet — next year is more likely, if ever.

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