Google, Inc.'s (NASDAQ: GOOG) Android mobile operating system just received a rather large shot in the arm. The Open Handset Alliance, which supports the Android operating system, gained a bunch of new members this week. Companies like Sony Ericsson, Vodaphone Group Plc and ARM Holdings all joined the Google-created OHA, but there remains one major feat for these hardware manufacturers and mobile phone carriers.

That feat is to create more Android-powered smartphones that will compete with the likes of Apple Inc.'s (NASDAQ: AAPL) iPhone and the most-used mobile operating system in the world, Symbian, where Nokia Corp. (NYSE: NOK) is the main cheerleader. Sony Ericsson announced that it would have an Android-powered device sometime in 2009. With a total of 47 members, Google's feat here is pretty staggering. To get that many leading hardware and mobile partners to join in on anything is a monumental feat.

Then again, 64 companies have indicated they plan to join the Symbian Foundation, which will give them royalty-free access to Symbian's marketing-leading software for mobile handsets and smartphones. The battle is far from over, with Symbian, Android and the tightly-controlled iPhone ecosystem all playing on the same field (and there are others as well). Google's Android is not guaranteed market-leading success unless it can find a way to give its partners some type of competitive advantage. So far, there is very little compelling evidence this is happening -- but then again, the first Android handset only shipped two months ago.

A week ago, the wireless division of Verizon Communications (NYSE: VZ) -- Verizon Wireless -- surprised the entire U.S. wireless industry by stating its intention to open its network to any compatible device running any phone-based application any customer wanted. In a country where wireless operators have been extremely close-minded about just about everything, this announcement sets the stage for things to come. The wireless industry is facing major changes.

Verizon trumped itself this week, announcing that Verizon Wireless would partner with Google (NASDAQ: GOOG) in its "open handset alliance." When Google announced its Android mobile operating system platform about a month ago, the web's largest search provider had lined up an impressive array of partners right from the start. Its goal: to remove all the "walled garden" roadblocks from mostly American wireless companies to allow any customer to use any phone on any network by guaranteeing cross-carrier compatibility. Now, technically, the two actual radio standards in use among wireless companies in the U.S. will need addressing, but that comes later.

Until then, Verizon is enjoying a plethora of good press in embracing Google's "open" access model. Perhaps Verizon recognizes that the wireless landscape is set to change soon and it wants to get in its good graces through a potential large competitor, Google. After all, Google announced its intention to bid on upcoming radio airwaves next month (with unknown ambitions at this time), so established telecom companies may see their world turned upside down in the next five years. After a controlled amount of competition and a tight control on the customer, these changes will be most welcome by customers -- and hopefully wireless providers.

The NPD Group released its quarterly run-down on the mobile phone industry. The research organization, known for its comprehensive consumer and retail information, looks at quarterly sales numbers and compares the findings to its own historical numbers.

There is definitely some salient info for investors looking at or in the mobile phone market:

• Smart phone are on fire: "the percentage of smartphones sold during the third quarter increased from 4% of all phone sales in the third quarter of 2006 to 11% during the same timeframe in 2007 – an increase of 163% year over year."
• Convergence of musical devices with phones: "Fifty percent of new phones were able to play music in the third quarter of 2007 (double the prior year) and 11 percent were smartphones."

"The mobile phone market is not only growing, it is growing smarter," said Ross Rubin, director of industry analysis for NPD. "The nearly threefold increase in smartphones shows that this once negligible niche is becoming a more influential force in the consumer market -- attracting entrants such as Apple, Inc. (Nasdaq: AAPL) and the Open Handset Alliance."

While Motorola, Inc. (NYSE: MOT) commanded the largest marketshare of the top 5 manufacturers at 31%, growth in the industry (47% year over year) is jacking up the competition. Apple has made a splash with the iPhone and its going to be interesting to see what route Google, Inc. (Nasdaq: GOOG) is going to take with its rumored gPhone. Read Sheldon Liber's good analysis of what Google may be planning to do with a mobile platform.

As the iPhone gets more traction, it will be interesting to see what NPD's analysis will look like in a year from now.

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Disclosure: He holds a position in GOOG but none in the other stocks mentioned.