Droid Shatters the Competitive Landscape

Not since the launch of the iPhone in 2007 has the announcement of a new product had as dramatic an effect on the competitive landscape of the smartphone business as did yesterday’s Verizon Wireless release of the Motorola Droid. The day after Droid, the handset, wireless networks, mapping, and navigation markets all look very different.

Although the Droid handset itself is a very nice piece of hardware, the real news here is Google’s Android 2.0 software. This major overhaul of the operating system and basic applications has taken Android from an interesting wannabe to a top-tier contender in the mobile software market. And the inclusion of Google Maps Navigation, with its free real-time, turn-by-turn driving instructions turns the nav business on its head.

The coming of age of Android could be very bad news for the weaker competitors in the smartphone business. Droid is no iPhone killer–the idea is silly–but it is a viable competitor. At worst, Apple’s penetration into the market will grow a bit more slowly.