Intel CEO Paul Otellini said on Tuesday that Google Android is currently undergoing growing pains from the transition from chaos to order as the platform moves toward Apple’s strategy of exerting more control.

Otellini asserted during an investor meeting in Santa Clara, Calif., that Google’s efforts to attract users to Android will need to be tempered by efforts to stem the growing problem of fragmentation on the platform, CNet reports.

“Google’s model is to get as broad a base as possible because, how do they get paid? They don’t get paid by selling Android. They get paid by clicks. At the end of the day, the more pervasive Android is, the more money Google ultimately makes because advertising revenue can accrue from it,” he said. “I think there is some growing pains that Android is going through…How do you create order out of chaos?”

According to Otellini, Apple stands on the other end of the spectrum with a high level of order in its products. “Apple’s objective is to control everything end to end so they can control the experience and the pricing.”

Android faces a problem similar to Microsoft’s efforts to exert control over the Windows ecosystem, Otellini continued, noting that Windows originally ran on a variety of platforms before settling on Intel’s x86 architecture.

In time, Otellini sees Android moving away from openness in order to fight fragmentation. “The notion of compatibility forwards and backwards, the notion of verification…is something you’ll see imposed on the Android ecosystem over time. If you read the press about [Android's] anti-fragmentation agreements that’s exactly what’s happening today,” he said.

Beyond just talking about Android, Otellini also took the opportunity to quell recent rumors that Apple will abandon Intel for the ARM architecture on its line of Mac laptops.

“[Apple's] growth in Macs has quadrupled since they shifted to Intel, their market share has quadrupled since they shifted to Intel. And that value proposition has served them very well,” the CEO said. “I don’t see their Mac line moving in any different direction anytime soon.”

According to a survey last month, 87 percent of Android developers view fragmentation as a problem on the platform, with 57 percent viewing it as a huge or meaningful problem.

Reports that Google had clamped down on handset makers led some to suggest that the search giant was enforcing “non-fragmentation clauses” for Android licensees. Google VP Andy Rubin responded by noting that the company’s anti-fragmentation program had been in place in version 1.0 of the mobile OS.

“Our approach remains unchanged: there are no lock-downs or restrictions against customizing UIs,” said Rubin. “There are not, and never have been, any efforts to standardize the platform on any single chipset architecture.”

Apple CEO Steve Jobs said last fall that the comparison between iOS and Android is not one of open vs. closed, but rather integrated vs. fragmented.

“In reality we think the open vs closed argument is just a smokescreen to try and hide the real issue which is: what’s best for the customer, fragmented or integrated? We think Android is very fragmented and becoming more fragmented by the day. We prefer integrated so the user doesn’t have to be the systems integrator,” Jobs said.

A lawsuit by Skyhook Wireless alleging patent infringement and business interference by Google has resulted in the release of large amounts of documentation detailing the Android-maker’s tactics in maintaining control over its ostensibly open platform.

A report by Nilay Patel of This is my next digs through more than 750 pages of documents unsealed by the court.

“Perhaps surprisingly,” Patel wrote, “it’s relatively clear from the evidence that Google is the major gatekeeper between OEMs and the market.”

The documents reveal that Google has unique agreements with different hardware makers, and that each Android license has an expiration date.

In addition to the core Android software and its Linux kernel, which are largely freely available for unrestricted use, Google maintains tight control over its own layer of proprietary apps, which contribute much of the value of the Android platform.

Google’s control over Android devices is no more open than Apple’s App Store approvals

Google’s contracts leverage the company’s own, closed Android apps (including Gmail, Google Maps, YouTube and Android Market) to block competing services (such as Skyhook’s location services) or prevent unapproved devices from appearing on the market, the evidence indicates.

“In order for a specific device to get a license for the [Google] apps, it must pass the Android Compatibility Test Suite and meet the Android Compatibility Definition,” Patel explained. “How Google exactly determines what passes the test is really the core issue in this case — Skyhook claims Google uses the threat of incompatibility to act anti-competitively.”

Google’s Android licenses with hardware partners allow the company to change the tests and compatibility definitions at any time, “so basically there’s nothing keeping Google from changing the CTS or ACD any way it wants in order to keep a particular device off the market,” the report noted.

While hardware makers are free to build Android devices that aren’t rated as compliant by Google and ship without the search giant’s apps, there is no market for such “open” devices because hardware makers’ carrier contracts require Google’s apps. “If Motorola shipped software that didn’t have Google’s blessing (and apps),” Patel wrote, “it would immediately violate its contracts with carriers.”

Google vetoes Motorola partnership with Skyhook

Core to the lawsuit by Skyhook is a decision by Google to threaten a “stop ship issue” to block approval of Motorola’s Droid X phone last summer because Motorola had contracted with Skyhook to provide location data services for the phone’s users.

Google first learned of the partnership between Motorola and Skyhook in an online news article, setting off an email discussion between Google’s executives that is documented in the Skyhook legal filings.

Google’s location product manager Steven Lee wrote to company co-founder Larry Page, “The risk we face is if Skyhook creates a perception in the industry that they are way better [in providing location data], then more and more partners will switch to them without doing much testing or due diligence themselves.

“And that would be awful for Google, because it will cut off our ability to continue collecting data to maintain and improve our location database. If that happens, we can easily wind up in the situation we were in before creating our own location database and that is (a) having no access at all or (b) paying exorbitant costs for access.”

In May 2010, Google initially told Motorola that using Skyhook’s service would contaminate Google’s own location database. Motorola then verified that Skyhook had passed the Android compatibility test. But Google maintained that Skyhook’s system could not be approved and issued a “stop ship” order to Motorola, resulting in decision by Motorola chief executive Sanjay Jha to pull Skyhook from the Droid X to enable it to reach the market.

Arbitrary and capricious

Before Motorola could ship the new Droid X, however, Samsung delivered its Android-based Galaxy S smartphone with Skyhook’s location service installed, prompting Motorola to ask why Google was putting it in “in an uncompetitive position.” Google’s response was that “Motorola should not be concerned with other OEMs and their devices.”

At the launch announcement of Droid X in late June, Motorola complained to Google that “it’s unacceptable to be put in a position which limits our ability to compete,” saying that the company was in the process of getting 40 other Android devices through the approval process, and that “over half have been impacted by requirements which were not available or clear prior to submission.”

Google responded, “controlling fragmentation on an open platform to ensure that Android is a success… will mean that we learn some lessons the hard way. Having a vibrant ecosystem around an un-fragmented platform is in everyone’s interest, so we all have to bear the burdens.”

Motorola’s difficulty in getting Android models approved by Google likely plays into the company’s decision to develop its own Linux-based smartphone platform independent of Android.

Skyhook alleges anti-competitive behavior by Google

Meanwhile, Skyhook was insisting to Motorola that its location service was being deemed incompatible by Google “based solely on the interpretation of the word ‘satellites’” and not for any technical or performance reason. Patel notes that “Skyhook also claimed it was not shown any documentation from Google saying that XPS [Skyhook's location service] was not compliant with the Android compatibility document.”

Skyhook offered to solve any potential ‘data contamination’ problem by disabling location data collection by Google’s apps, but Motorola responded that its Android license required that Google’s apps be allowed to collect location data, and that its carrier contracts require that Google’s apps be installed on its phones.

In July, Motorola again complained about Samsung’s Google-approved use of Skyhook, to which Google responded that Samsung had also stopped using Skyhook’s services. Motorola subsequently told Skyhook that “Android devices are approved ‘essentially at Google’s discretion,’ and that Motorola could not afford to break its relationship with Google,” according to the report on the documentation.

The next month, Motorola terminated its contract with Skyhook, saying that the company had made unauthorized statements to the press and had “failed to deliver a functioning product that can be loaded on Motorola Android-based products.”

Skyhook subsequently sued Google for business interference, launching a case very similar to the charges that Microsoft faced in the 90s for contractually obligating the bundling of an unremovable Internet Explorer web browser on Windows PCs to erase the market for third party browsers.

Android vs iOS

The Skyhook case demonstrates Google’s increasing efforts to limit further fractionalization of Android by blocking the ability of third party hardware makers to release products or services using its own Android licensing and approval process, which goes above and beyond the Open Handset Alliance.

This makes Google’s Android hardware platform for devices that are sold “with Google” as much under Google’s control as the App Store is under Apple’s strict curation.

Apple’s chief executive Steve Jobs stated last fall that “Google loves to characterize Android as ‘open’ and iOS and iPhone as ‘closed.’ We find this a bit disingenuous and clouding the real difference between our two approaches.”

Jobs described various Android app stores as “a mess for both users and developers” and noted that “many Android apps work only on selected handsets, or selected Android versions,” alluding to the fact that most Android phones still run an OS release roughly a year old, and often can’t be updated for 3 to 6 months after Google makes an update available.

This spring, Google’s Android chief Andy Rubin publicly announced an intent to minimize such issues by saying that even the ostensibly open core of Android 3.0 would not be made available to outside programmers for use in unauthorized ways.

Thus, while Apple’s “walled garden” ecosystem around the iPhone, iPod touch and iPad limit what third parties can do to Apple’s platform and products, Google’s Android is already being used to leverage broad competitive control over a wide variety of hardware makers, forcing them to all make products that report data to Google and to change their designs or refuse to do business with other companies on Google’s request, under threat of “stop orders” that can prevent the sale of such unapproved devices at any time.

Sony revealed Tuesday two Google Android-based touchscreen tablets, which will released this fall in an attempt to catch up to Apple’s year-long head start with the iPad.

The tablets, dubbed S1 and S2, were unveiled at a media launch in Japan, Reuters reports. Sony will attempt to leverage its successes in the gaming industry to drive sales of the tablets, as both the S1, which sports a 9.4-inch display, and the S2, which features two 5.5-inch displays, will be compatible with select PlayStation games.

Sony deputy president of consumer products and services Kunimasa Suzuki indicated that the devices will run the tablet-designed Google Android 3.0 Honeycomb operating system, as he pulled a prototype from a jacket pocket at the launch.

In an effort to distinguish itself from the growing list of Android-based iPad competitors, such as the Motorola Xoom and Samsung Galaxy Tab, Sony has developed two unique form factors for its tablets. The S1 has an “off-center of gravity form factor,” while the S2 features a foldable dual-screen setup.

The two devices will be marketed under the “Sony Tablet” brand and will feature heavy cross-promotion of Sony’s Qriocity media suite.

The S1 will feature a Tegra 2 processor, Wi-Fi and 3G/4G cellular data capability. IT will also include an IR port for AV controls with Sony’s line of Bravia televisions and support for the Sony-initiated Digital Living Network Alliance standards. Sony held off on revealing further details on either the S1 or the S2, disclaiming that “design and specifications are subject to change without notice.

The devices are slated for a global release in the fall of this year.

In January, Sony surprised attendees of the Consumer Electronics Show when the company declared its intentions to take the No. 2 spot in the tablet market within a year, despite not having released a tablet.

Earlier this year, Sony unveiled the next-generation version of its PlayStation Portable, dubbed the NGP in hopes of striking back at Apple, whose popular iOS devices have quickly begun cannibalizing Sony’s share of the gaming market.

The Japanese electronics giant also took the wraps off a partnership with Google and other Android handset makers that will produce the PlayStation Suite, an Android-compatible content platform that will bring both classic and new PlayStation games to the mobile operating system.

“Users will be able to enjoy PlayStation content on an open operating system for the first time in PlayStation history,” the company said in a statement in January. The move is a break from precedent from Sony, which has preferred its own proprietary formats over open ones.

Sony faces an uphill climb against Apple, which has attracted crushing demand for the iPad 2. Apple COO Tim Cook told investors last week that the iPad 2 is experiencing “the mother of all backlogs.” Supply constraints caused Apple’s quarterly sales of the iPad to decline to 4.69 million in the first quarter of calendar 2011, but Apple is still expected to sell 40 million iPads this year.

In April, research firm Gartner revealed that it expects Apple’s iPad to continue to dominate the tablet market through 2015. The market is expected to grow to 294 million tablets in 2015, with Apple maintaining an estimated 47 percent market share.

Google’s flagship Android 3.0 Honeycomb competitor to Apple’s iPad appears to have failed at launch, with Motorola Xoom sales estimated by Deutsche Bank to have reached just 100,000 units, a figure far lower than initial projections of failure from Morgan Stanley and RBC.

The Xoom has been hampered by a high initial price, low build quality, hardware features that were missing or nonfunctional, operating system and bundled software that was incomplete and unrefined, a scarcity of tablet-optimized applications and what appears to be a general absence of interest in tablets outside of the iPad.

Original estimates suggested Motorola would sell between 3 to 5 million units in 2011, a rate that would require as much as ten times the sales that analysts have estimated over its first two months. Instead, Motorola has reportedly sharply reduced its production orders as it evaluates demand.

In contrast to the estimated 100,000 Xoom units sold in its first two months, Apple sold 300,000 iPads on its first day of sales last year. In the final quarter of 2010, the company sold 7.33 million iPads, or about 2.4 million per month. The company is expected to announce official iPad sales figures for its most recent quarter of earnings later this month.

Apple was reported to have built around 2 million iPad 2s in preparation for launch, and is now estimated to be producing around 2.5 million units per month, with “conservative estimates” saying that Apple will begin producing 4 to 4.5 million per month to meet a growing demand that is outpacing last years’.

iPad enthusiasm fails to raise tide for other boats

While the original iPad was initially estimated to have limited sales prospects and was widely panned as being “just a big iPod touch,” the unexpectedly high demand it generated in the market was immediately expected to spill over onto similar devices from competitors, including Dell’s Streak and Samsung’s original Galaxy Tab, both of which debuted as smaller 5 to 7 inch devices last year.

However, Apple’s chief executive Steve Jobs predicted last October that such devices would fail in the market because they could not offer a clear advantage over smartphones, while also failing to provide enough screen real estate to support a real tablet experience.

Jobs also predicted that companies would abandon the 7 inch form factor this year, which both Motorola and Samsung have already done. Samsung announced a 10.1 inch version of its Galaxy Tab at February’s Mobile World Congress, but then returned to the drawing board after the release of iPad 2, admitting that its first design was “inadequate.” Samsung now hopes to deliver a Honeycomb tablet in June.

Honeycomb buzz suffers colony collapse disorder

Motorola’s Xoom was first to market with Google’s Android 3.0 Honeycomb operating system, the initial version of Android specifically designed for tablets. The Xoom was originally billed as being significantly faster than iPad, capable of running Adobe Flash, and promoted as having a more engrossing 3D user interface, complete with video conferencing capabilities the original iPad lacked.

However, the subsequent release of Apple’s iPad 2 erased Xoom’s speed advantages, added FaceTime cameras and undercut it on price, while Android’s delayed, experimental support for Flash is still not able to deliver reasonable performance even for web videos, let alone the majority of Flash content that was originally designed to work on full power Windows PCs equipped with a mouse.

Google’s Android 3.0 Honeycomb platform has also handicapped iPad competitors with unfinished edges such as a lack of HTML5 web savvy and a paucity of polished first or third party apps comparable to Apple’s own Pages, Keynote, Numbers, iMovie and Garage Band and the more than 65,000 other third party iPad-optimized apps now available.

The openness of Google’s Android platform has also distracted customers from getting a clear picture of what Honeycomb tablets actually represent. Prior to Google even finishing its tablet-oriented release, Android licensees such as Dell and Samsung began offering tablets running Android 2.2 Froyo against Google’s recommendations, resulting in hardware with clear disadvantages and lacking an ability to upgrade to the planned 3.0 release. Google has since suspended access to Android 3.0 source code to prevent further unanticipated use of its formerly open source code.

Motorola’s false start with the Xoom threatens to blight the outlook for Honeycomb tablets in advance of a series of similar offerings from Samsung, Acer and Toshiba expected to hit this summer. LG is also rumored to be partnering with Google to deliver a “Nexus” branded tablet that may divert attention away from other Honeycomb tablets in the same way that Microsoft’s Zune destroyed the market for PlaysForSure media players, and as its Nokia partnership may likely starve initial interest from other competing Windows Phone 7 devices.

A high profile failure for Motorola’s Xoom could poison the well for subsequent Honeycomb tablets much the same way that the failure of initial Google TV appliances from Sony and Logitech appears to have erased the prospects of mass consumer demand for an Android-based set top box.

Bleak outlook for tablets outside of iPad

Deutsche Bank analyst Chris Whitmore warned in a note yesterday that “iPad challengers must either undercut on price (negative margin implications) and/or offer a superior user experience,” and said his firm’s tablet estimates remain below consensus “due to our concerns that non-iPad tablets will underwhelm.”

Whitmore also announced slashed PC growth estimates, from initial 9 percent year-over-year growth in 2011 to just 4 percent, primarily due to weakness in the consumer market due to cannibalization by smartphones and iPads.

“We believe weak end demand in Europe and the U.S. is directly related to pressure from both the iPad and smartphones, where consumers continue extending the lives on existing hardware,” Whitmore wrote. “On the other hand, corporate demand remains healthy with no signs of a slowdown as the upgrade cycle continues unabated.”

He added that it “appears that iPad cannibalization [of PC sales] is tracking above our original 30% cannibalization estimate. As discussed in prior research, Apple remains the primary beneficiary of this technology transition which is increasingly coming at the expense of PC vendors (Acer, HPQ, etc).”

New data released Monday revealed that Google’s Android mobile OS has widened its lead on Apple’s iPhone and gained significantly on Research in Motion, the top smartphone platform in the US.

According to a comScore report released Monday, smartphone ownership in the US grew 60 percent year over year to 63.2 million owners in the three months ending in December 2010. Google saw the biggest gains, climbing within several points of BlackBerry maker RIM.

Meanwhile, Apple grew 0.7 percent from 24.3 percent of total smartphone subscribers in the US in the September 2010 quarter to a 3 month average of 25 percent in December 2010.

Google, which leapt past Apple to take the No. 2 spot in November, continued its rapid growth, posting 7.3 percent growth from last quarter in its platform market share. As of December 2010, the Android maker had taken 28.7 percent of the US smartphone market share, compared to 21.4 percent in the third quarter of 2010.

RIM saw its share of US smartphone subscribers plummet from 37.3 percent in September 2010 to 31.6 percent as of December 2010. With sales of Blackberry smartphones slowing in the US, the Waterloo, Ontario-based company has shifted its focus to international markets as of late, resulting in just one-third of its revenue coming from the US last quarter.

Microsoft saw its share of subscribers drop from 9.9 percent in September 2010 to 8.4 percent in the December quarter, as Windows Phone 7 failed to gain traction. Palm also continued to lose share, dropping from 4.2 percent to 3.7 percent over the same period.

Source: comScore MobiLens

Last month, research firm Canalys reported that the Google platform, which includes Android as well as Chinese variants OMS and Tapas, had overtaken Nokia to become the top smartphone platform maker in the world.

According to data published Monday by IDC, Apple still holds its position as the No.2 worldwide smartphone maker, though top Android vendors, such as Samsung and HTC, did see impressive growth.

The iPhone maker may post significant gains in market share this quarter with the release of the iPhone 4 on Verizon. The nation’s largest wireless network announced last week that presales of the iPhone 4 beat the carrier’s previous sales records in just two hours. According to one analyst, the preorder and launch supply of CDMA iPhone 4s could include as many as 2 million units.

Andy Rubin, the mastermind behind Google’s Android mobile operating system, demoed a prototype Android-based tablet from Motorola on Monday at this week’s D: Dive Into Mobile Conference.

The prototype was running Honeycomb, the tablet-optimized 3.0 version of Android OS due out “sometime next year,” and will sport a “dual core 3D” processor, an NVIDIA processor and video chat, Engadget reports.

Rubin, a former Apple engineer who now oversees development of Google’s Android initiatives, teased the tablet during an interview with Walt Mossberg and Kara Swisher of The Wall Street Journal.

During the interview, Rubin also showed off the just announced Nexus S smartphone, a flagship Android device that Google and Samsung are partnering together on. The Nexus S will ship with Gingerbread, Android version 2.3.

After Rubin revealed details about next year’s Android version 3.0, Mossberg asked Rubin: is Honeycomb “a version that happens to work on tablets, or is it for tablets?” To which, Rubin replied “It’s a bit of both.”

In October, Apple CEO Steve Jobs downplayed the threat that Android tablets present for the iPad. “Even Google is saying don’t use Froyo [the current release of Android OS], and instead to wait to use next years’ version. What does it mean when a software maker says not to use their release and you use it anyway?” said Jobs during an earnings call.

With Google’s Honeycomb Android update customized specifically for tablets, the rivalry between iOS and Android should heat up next year. Samsung released the Galaxy Tab, the first major touchscreen tablet based on Android earlier this year, selling 600,000 units in the first month of availability, less than the iPad, which reached one million sales in just 28 days. Initial reviews of the Galaxy Tab were generally positive, though some reviewers complained about the pricing and stability of the device.

Motorola and Apple are currently embroiled in a series of patent lawsuits against each other over smartphone, mobile and wireless technologies. Most recently, Apple added 12 more patents to its lawsuit against Motorola, bringing the total count to 24. Meanwhile, Motorola is trying to have those patents dismissed through a declaratory judgment.

The iPhone and devices running Google Android are the most desired smartphones in the U.S., but men tend to prefer Android while women gravitate toward Apple’s iOS, a new survey has found.

Nielsen on Wednesday released the results of its October survey of mobile phone users. It found that the iPhone was “most desired” among likely smartphone upgraders in the U.S., ahead of Android.

But Android found its greatest share when the results were viewed by gender: 32.6 percent of male respondents said they wanted an Android smartphone, while 28.6 percent of men opted for the iPhone.

Women, on the other hand, strongly prefer the iPhone, with 30.9 percent opting for Apple’s handset, while 22.8 percent of women said they want a device running Google Android. For both men and women, BlackBerry came in third while Microsoft’s Windows Mobile took fourth.

In terms of age, the iPhone led in all demographics except ages 35 to 54. In that range, 27.4 percent of “likely smartphone upgraders” said they would choose Android, more than the 26.3 percent who said the iPhone.

Among users planning to get a new smartphone, current smartphone owners preferred the iPhone with 35 percent choosing Apple, versus 28 percent for Android. Consumers who own “feature phones” were less decisive, with 25 percent unsure what they would buy.

Nielsen also found that the iPhone has edged Research in Motion’s BlackBerry platform in terms of market share. The survey shows Apple with 27.9 percent of the market, while BlackBerry holds 27.4 percent. That contrasts with a report also released on Wednesday, which found that the BlackBerry had overtaken the iPhone in terms of mobile browser usage in the U.S.

In October, Nielsen revealed that sales of all devices running Google Android had exceeded the iPhone for the first time. However, Wednesday’s new survey shows total market share among users, rather than current sales.

While Google’s Android mobile operating system has seen a fivefold increase in availability in the corporate market over the last nine months, Apple’s presence with iOS has held strong and still nearly doubles that of Android.

New data revealed Wednesday by ChangeWave Research shows that Android has gone from just a 3 percent availability in the corporate market in November 2009 to 16 percent in August 2010. From May 2010 to August 2010 alone, the presence of Google’s operating system grew from 10 percent to 16 percent.

But during the same period from May to August, Apple’s iOS — which powers the iPhone, iPad and iPod touch — managed to grow in the enterprise market as well, from 30 percent in the spring to 31 percent in the summer.

Most of the growth of Android and iOS has come at the expense of the corporate leader, Research in Motion’s BlackBerry OS. Though it still carries more than double the corporate market presence of Apple’s iOS, BlackBerry fell 3 percent — from 69 percent to 66 percent — between May 2010 and August 2010.

Other, smaller competitors also lost availability, with Microsoft’s Windows mobile dipping from 10 percent to 9 percent in the three-month span, and devices from Palm shrinking from 7 percent to 6 percent.

The survey of 1,602 corporate IT buyers asked the question: “Which mobile operating systems are used on the smartphones your company currently provides?”

The survey also found evidence that even more change could be coming to the corporate smartphone market in the near future, as 35 percent of respondents said they plan to buy new smartphones next quarter.

In July, another survey from ChangeWave fund that in the general market, Apple’s iPhone was killing interest in RIM’s BlackBerry. It also found that consumers are more satisfied with the iPhone than with Android handsets.