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Tests of an early Android 2.2 build show vast performance gains, indicating that even older Android handsets could gain new life by running applications several times faster than today — and that Google has software it can use to combat a hardware bump in Apple’s (s aapl) hotly anticipated next-generation iPhone. Google is also poised to reduce fragmentation with this release — codenamed “Froyo” and expected at next week’s Google I/O developer conference — which would help both consumers and developers have a more common Android experience across the many handsets built using the platform.

AndroidPolice has been running Android 2.2 on a Nexus One for nearly a week, but yesterday benchmarked performance of the build using Linpack for Android. The results show a nearly 450 percent performance boost, as Froyo appears to use a fast compiler for the Dalvik VM used by Android. Unlike many other smartphones, applications for Android are written in Java and run in a virtual machine atop the Linux kernel — with a quick JIT, or Just In Time compiler, application code can be executed faster. The lengthy video below provides an overview of the Dalvik VM from 2008.

Given that Google is hosting a specific session for JIT compiling within the Dalvik VM at next week’s Google I/O event, it’s a pretty safe bet that Froyo will bring the speed boost that AndroidPolice has clocked. Which means Google phones running on Android 2.2 will execute application code far faster by using software, not hardware. That’s a unique situation because while other mobile platforms might see marginal performance gains through an operating system upgrade, it’s not likely those efforts would yield a gain as large as 450 percent.

While Google doesn’t control which Android handsets will see Android 2.2 — that’s left to the carriers, with the lone exception being Google’s own Nexus One — the speed bump isn’t all I’m expecting next week. I suspect that Google will continue pulling its applications out of the core Android platform and make many of them available to device versions through the Android Market. While that won’t completely remove the fragmentation issue caused by Android 1.5, 1.6 and 2.1, it will reduce the effects — handsets with Android 1.5 or 1.6 would still have the older user interface, but would see more feature parity with Android 2.1 devices. The ideal situation would be for all capable handsets to run Android 2.2, but given the carrier control, that’s highly unlikely — a shame really, because many older handset, such as the original G1, run just fine with the Android 2.1 ROMs found on enthusiast sites and forums.

Related research on GigaOM Pro (sub req’d):

Google’s Mobile Strategy: Understanding the Nexus One