Which Smartphone Could Rise on this News? – Apple Inc. (AAPL), Google Inc (GOOG), Nokia Corporation (ADR) (NOK)

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A Chinese ban?

Google Inc (NASDAQ:GOOG)’s Android is the leading smartphone operating system in China. It seems that the Chinese government has taken notice of the increasing control of Android over the Chinese smartphone industry. According to a recent paper by the Chinese Ministry of Industry and Information Technology, the entire industry has become too dependent on Android, and indirectly on Google. A recent report in Bloomberg has also raised concerns about the findings of this paper and the impact it can have on the Chinese smartphone market.  The paper also said that Google Inc (NASDAQ:GOOG) has discriminated against local companies by creating hindrances in the effective transfer of code. Google Inc (NASDAQ:GOOG) was also criticized for allegedly using commercial agreements to stop local companies from business development of devices.

It is too soon to tell if China will take any action against Android, but the shaky relationship between Google Inc (NASDAQ:GOOG) and China is no secret. The search engine giant has already left this highly lucrative market to the Chinese search giant Baidu.com, Inc. (ADR) (NASDAQ:BIDU). If the Chinese government takes any action against Android, it will transform the entire smartphone industry.

Bottom line

Nokia was China’s top smartphone vendor in 2011, but its market share has slipped drastically. According to recent report, the smartphone market share of Nokia has fallen to a meager 3.7%, as compared to an approximately 17% market share for Samsung. At the beginning of 2012 Blackberry had a 3.5% share in Asia/Pacific which has slipped down further due to the wide popularity of Android.

China might be the deciding growth factor in this highly competitive industry. If any restrictions are placed on Android, the companies that will benefit are Apple Inc. (NASDAQ:AAPL), Nokia Corporation (ADR) (NYSE:NOK), Microsoft, and BlackBerry. Apple might still face some difficulties in gathering a large following in China due to its high price points. Microsoft will be able to find a much higher demand for its newly released Windows Phone 8 software, which is already available on major manufacturers such as HTC, Samsung, and Nokia. Lumia and BB10 models will also find it much easier to find a stronghold against a weakened Android.

The article Which Smartphone Could Rise on this News? originally appeared on Fool.com and is written by Mohsin Saeed.

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