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Motorola’s Droid, which uses the Android 2.0 operating system (OS), has hit the market. According to iSuppli, the phone will drive the growth of the OS as well as Motorola’s bottom line.

The company accounted for 5.4% of worldwide unit shipments in the second quarter of 2009, which is down from its 22.5% total in the second quarter of 2006, iSuppli says. While mobile handset shipments grew by nearly 7% in the third quarter, Motorola saw an 8.1% decline in the same period. And, it was the fifth largest cell-phone company in the world in the third quarter of 2009, while it was fourth in the second quarter and as high as second in the first quarter of 2007. Droid should help reverse those trends.

“Droid is potentially a game changer for Motorola,” said Tina Teng, senior analyst of wireless communications for iSuppli. “Motorola now is no longer just emphasizing slick form factors, such as it did with its RAZR handset. The company now has focused on the hottest segment of the global handset market, providing compelling smart-phone products that are usable and expandable through third-party applications. Droid also has capitalized on the trend toward smart-phone widgets, which allow users to customize products according to their own personality.”

Android debuted in 2008, so it is only expected to account for 2.4% of the total smart OS market in 2009. Yet iSuppli expects it to see the fastest growth in usage of any smart-phone OS, with 2013 shipments rising at a compound annual growth rate (CAGR) of 118% from 2008. This will give Android a 9.1% share of the global smart-phone market in 2013 as well as fourth place in the rankings, up from its last place slot at seventh in 2008 and 2009. Several factors will propel this success.

First, Android is licensed by seven key handset OEMs, including Samsung (number two), LG (number three), Motorola (number four), and Sony Ericsson (number five). It’s also supported by eight global wireless operators—including Verizon, Sprint, T-Mobile, and China Mobile—which is the most among the seven major operating systems in the smart-phone market. And, the free turn-by-turn navigation available on the Droid and enabled by Android will attract consumers and challenge the portable navigation device industry.