In Android, in order to display a progress bar in a Notification, you just need to initialize setProgress(...) into the Notification.Builder.
Note that, in your case, you would probably want to use even the setOngoing(true) flag.
Integer notificationID = 100;
NotificationManager notificationManager = (NotificationManager) getSystemService(Context.NOTIFICATION_SERVICE);
//Set notification information:
Notification.Builder notificationBuilder = new Notification.Builder(getApplicationContext());
notificationBuilder.setOngoing(true)
.setContentTitle("Notification Content Title")
.setContentText("Notification Content Text")
.setProgress(100, 0, false);
//Send the notification:
Notification notification = notificationBuilder.build();
notificationManager.notify(notificationID, notification);
Then, your Service will have to notify the progress. Assuming that you store your (percentage) progress into an Integer called progress (e.g. progress = 10):
//Update notification information:
notificationBuilder.setProgress(100, progress, false);
//Send the notification:
notification = notificationBuilder.build();
notificationManager.notify(notificationID, notification);
You can find more information on the API Notifications page: http://developer.android.com/guide/topics/ui/notifiers/notifications.html#Progress
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