The app space is growing more crowded by the millisecond, but for its 2010 holiday campaign, Coca-Cola has delved into an as-yet largely untapped mobile space: Android live wallpapers.

Android-based smartphones have a setting that allows the user to feature animated wallpapers on their phone’s homescreen. Most are falling leaves or whirling galaxies, but on Google’s Mobile Blog yesterday, the mediaco announced that it was partnering with Coca-Cola on a branded version.

Coke’s live wallpaper is a direct extension of its holiday ad (airing in the US), which features Santa peering into, and shaking, a snow globe containing a miniaturized urban landscape. When Santa handles the globe, the world inside it is turned topsy-turvy and people and objects start sliding around – closer to their loved ones, natch. (Check out this YouTube mashup featuring the Inception music dubbed over.)

The live wallpaper essentially turns a smartphone into the snow globe from the commercial. Depicting a village square – with subtle Coca-Cola branding in the background – the user can shake the app to make it snow, and tip it side-to-side to watch all the ad’s characters do their thing. Google is promoting the wallpaper on the Android Market as a featured application, as well as through its Ad Mob mobile network in the US. The wallpaper is not being promoted in Canada – the brand is choosing to focus on its polar-bear themed campaign and support of the World Wildlife Fund, says Coca-Cola spokesperson Scott Tabachnick – but it is available to Canadians in the Android Market.

The genius in the execution is that, unlike an app, the user will see the Coca-Cola-created scene every time they use their phone, as it’s always on the homepage. If Android continues to gain marketshare in the smartphone space, we think live wallpapers have a chance of becoming a hot new media strategy.