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Half of U.S. Mobile Subscribers Now Have Smartphones, Nielsen Says

Half of U.S. Mobile Subscribers Now Have Smartphones, Nielsen Says
March 29, 2012 1:31PM

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Driven by Android, more than two-thirds of people who acquired a new mobile device in the U.S. as of February of this year chose a smartphone, according to a new Nielsen study. In October 2010, only 29 percent of U.S. mobile devices were smart, Nielsen said. A separate study by ABI Research looking at phones globally reinforces Nielsen's study.

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Largely as a result of the Android explosion, Americans appear to be grabbing up smartphones as quickly as manufacturers and carriers can push them out, while leaving feature phones behind, a new study suggests.

The annual Nielsen Research survey of the U.S. wireless market shows that smartphone ownership soared by 38 percent, comparing February this year to February of last year. Smartphone users now make up half of all subscribers.

Smartphones are generally defined as those running advanced operating systems with Internet access and the ability to download applications, although many modern feature phones can match smartphones in capability.

Two Out of Three Ain't Bad

Nielsen said more than two-thirds of people who acquired a new mobile device as of February of this year chose a smartphone.

In October of 2010, only 29 percent of U.S. mobile devices were smart, the company said.

A separate study looking at phones globally reinforces the Nielsen findings. ABI Research on Thursday predicted that smartphone shipments will grow from 643 million this year to 1.1 billion through 2016, while shipments of non-smartphones will edge up only slightly from 1.08 billion to 1.09 billion during the same period.

Added together, ABI said, global handset shipments will grow 29 percent from 1.7 billion this year to 2.2 billion in 2016.

In the Nielsen study of the U.S. market, devices powered by Google's Android operating system led the charge, making up 48 percent of all new purchases in the past three months and an equal share of all smartphone owners in the current market. Android devices include Samsung's popular Galaxy S devices as well as those marketed under the Droid brand by Verizon Wireless, such as Motorola's Droid Razor and HTC's Droid Incredible.

Apple's iPhone is the second-most popular smartphone platform, making up 43 percent of acquisitions in the past three months and 32 percent of the overall market, an impressive ranking since Apple only sells one device, the latest version of which is the 4S, released in October via Verizon, AT&T and Sprint Nextel.

Research In Motion's BlackBerry devices, which presaged the smartphone market with messaging and e-mail capabilities in the early 2000s, saw its devices command just a 12 percent share of the market, with only 5 percent of acquisitions in the last three months. RIM is betting big on devices powered by its updated BlackBerry 10 operating system, due to be introduced to developers in May, to reverse its decline. The public won't have access to them until later in the year, however.

The market share for Microsoft's Windows Phone 7 devices was so small that Nielsen did not list it separately. The market share of "Other" devices was listed as 8 percent, and just 4 percent in the last three months.

Shift for Feature Phones

While the popularity of smartphones is unmistakable, feature phones that require minimal data plans -- Verizon Wireless charges $10 per 75 megabytes for them -- won't be phased out, just marketed differently, said analyst Kirk Parsons of JD Power and Associates.

"There will always be feature devices offered -- just in a different variety and [with different] capabilities and more targeted to specific services and applications like text-centric phones and music-enabled devices," Parsons said.

"Data plans will continue to evolve," he added, "as more subscribers start using more smartphones and run up against their monthly allowances sooner than they are accustomed to."

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