Google's Android system is beating Apple's iPhone. Android became the most popular choice for smart-phone buyers in the last six months, according to research firm The Nielsen Co.

Apple's (AAPL) iPhone is tied for second place with the BlackBerry platform from Research In Motion (RIMM).

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But before you start planning the iPhone's funeral, consider this: Nielsen looked at smart-phone purchases for six months of the year, but the iPhone 4 only became available on June 24. It's a sure bet that iPhone buying slowed dramatically in the spring as people waited for the new version.

So the really good comparison will be for the second half of 2010, as iPhone 4 sales ramp up and Android phone sales really hit their stride.

Still, the numbers so far say a good deal about the success of Google (GOOG) Android, a system that has come so far so fast that people are still wondering how it all happened. Wasn't the iPhone supposed to be killing the smart-phone market?

Here are some reasons for Android's success:

It's free. Well, kind of. Google gives the software away to phone makers like Motorola (MOT), knowing it will make money later by showing ads to Android users or selling them music or videos, Newsweek reports. And free is a very good thing for phone makers, especially because Android is good enough to let them compete seriously against the iPhone.

Google's chief executive would like to see 1 billion Android phones in use. If the company could just get $10 from each user, it would have $10 billion in Android business, Newsweek writes. Google's annual sales are about $21 billion.

 

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It's not Apple. Google doesn't have Apple's extreme control issues when it comes to Android. In fact, Google lets phone makers change Android (within reason) to become whatever they want. That's why Android phones don't look or act the same. Phone makers can differentiate themselves, which is highly appealing.

Hand it to Verizon. Poor Verizon (VZ), with no iPhones to show off. The company was desperate for a we're-cool-too gadget, and when decent Android phones started coming in, Verizon pounced. So Verizon, the largest wireless carrier in the country, began promoting the hell out of Android, contributing significantly to the momentum.

It's not locked to AT&T. How many times have you heard people say they would love an iPhone, if only it was on a carrier besides the faulty AT&T (T)? People love to hate AT&T, with its penchant for dropped calls and poor connections. Apple continues to partner exclusively with AT&T, to the detriment of iPhone sales. Rumors abound that the iPhone will head to Verizon next year as well -- a tradeoff for giving AT&T the iPad -- and the iPhone sales numbers would likely see a big boost in that case.

Newsweek has a smart writeup on Android and how it came to be a huge piece of Google's business. Google activates 200,000 Android phones a day. By 2014, analysts say, Android will have a quarter of the smartphone market (compared to 11% for Apple).
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