Smartphones Continue Upward Spiral

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Smartphones, Android-based models in particular, continued their relentless climb to sales dominance in 2010, consumer surveys and carrier financial reports show.

The Nielsen Company found in its fourth-quarter consumer survey that 45 percent of people who bought a cellphone in the previous six months bought a smartphone, up from the third-quarter survey’s 41 percent, the second-quarter survey’s 35 percent, and the first quarter’s 33 percent.

All told, as of December, 31 percent of cellphone subscribers in the U.S. owned a smartphone, up sequentially from 28 percent at the end of the third quarter, Nielsen found.

Also underscoring smartphones’ advances in the U.S. were separate announcements from:

• The NPD Group, whose quarterly consumers surveys found that, for the first time, smartphones accounted for all of the top five selling phones purchased by consumers in the quarter ending December 2010.

• In-Stat, which released a study projecting that smartphones will account for more than half of U.S. handset shipments in 2012.

• Verizon Wireless, which said more than 75 percent of the 872,000 retail postpaid net new subscribers acquired in the fourth quarter bought smartphones, bringing the percentage of retail postpaid subscribers with smartphones to 26 percent, up from a year-ago 15 percent.

• AT&T, which said sales of smartphones and other integrated phones that include a keyboard, accounted for 80 percent of postpaid-service phone sales in the fourth quarter, raising the percentage of AT&T’s 68 million postpaid subscribers with integrated devices to 61 percent, up from a year-ago 46.8 percent.

Consumer surveys attributed most of the gains in smartphone sales to Android-based models. NPD’s survey, for example, found that Android-based smartphones accounted for a majority of quarterly smartphone sales to consumers for the first time in 2010’s fourth quarter, when Android’s share rose sequentially by 9 percentage points to 53 percent.

In the second quarter of 2010, Android supplanted the RIM BlackBerry OS as the dominant smartphone OS through consumer channels and continued its share climb since then, NPD found.

Android’s sequential gains in the fourth quarter came at the expense of most other OSs, with the exception of Windows Phone 7, which was unavailable in the third quarter, and Palm’s WebOS, which maintained a 2 percent share.

Apple’s iOS share declined 4 percentage points to 19 percent of unit sales in the fourth quarter, while RIM’s share fell 2 points to tie Apple’s 19 percent. The share held by Windows Mobile, Microsoft’s legacy OS, fell 3 points to 4 percent, and the Windows Phone 7 OS debuted in the quarter with a 2 percent share. Palm’s WebOS held at 2 percent.

Nielsen’s consumer surveys also found Android in the clear lead among recent smartphone purchasers. In its December survey, Nielsen found that Android accounted for 43 percent of unit smartphones purchases by consumers during the previous six months, while Apple’s OS accounted for 26 percent and RIM accounted for 20 percent. The RIM and Apple shares are down from the October 2009 survey.

Among the installed base of smartphones, however, the share among the three operating systems was very close. Apple had 28 percent share, with RIM and Android coming in at 27 percent apiece.


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