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Mobile Phones

2 Out of 3 Buyers Pick Smartphones Over Feature Phones

2 Out of 3 Buyers Pick Smartphones Over Feature Phones
July 13, 2012 2:03PM

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Android's recent gains among U.S. smartphone buyers won't be enough to overcome Apple's overwhelming lead in the tablet market. So Google's biggest challenge is to find more effective ways to boost the popularity of Android in the U.S. tablet market. The new Nexus 7 tablet built by Google in partnership with Asus appears to be its best hope.

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The percentage of Americans who own smartphones reached an all-time high of 54.9 percent of all U.S. mobile subscribers in the second quarter of 2012, according to a Nielsen report released Thursday. What's more, 67 percent of those who acquired a new mobile phone during the past three months elected to buy a smartphone.

Among American smartphone owners overall, 51.8 percent have Android-powered devices, 34.3 percent have iOS handsets and 8.1 percent have BlackBerry models, Nielsen said. However, Nielsen researchers said 54.6 percent of recent mobile device buyers preferred smartphones running Google's Android mobile OS.

Apple's iOS was the second-most popular choice among recent U.S. smartphone buyers at 36.3 percent. The bad news for Research In Motion is that only 4 percent of recent buyers elected to buy a new BlackBerry model.

Despite Android's lead as the prevalent mobile OS in use in the United States, Apple retained its top position as the nation's leading smartphone manufacturer. Nielsen said 34 percent of U.S. smartphone users own an iPhone, whereas the top Android smartphone makers were Samsung (17 percent), HTC (14 percent) and Motorola (11 percent).

Google's Biggest Challenge

Android's share gains among recent U.S. smartphone buyers are important to Google's search business because a growing percentage of all browsing activities on a global basis originate from mobile devices. According to Net Applications, 8.2 percent of all the computing machines connected to the Internet today are mobile devices.

However, Android's recent gains among U.S. smartphone buyers won't be enough to overcome Apple's overwhelming lead in the tablet market. Net Applications reports that Apple's Safari remains the world's top mobile browser with a 65.8 percent share -- and with Apple's iOS similarly commanding the mobile OS market with a 65.3 percent share.

So Google's biggest challenge is to find more effective ways to boost the popularity of Android in the U.S. tablet market. The new Nexus 7 tablet built by Google in partnership with Asus appears to be the search engine giant's best hope for denting Apple's tablet lead in the short run.

When we asked IDC Research Director Tom Mainelli about the Nexus 7's prospects, however, he expressed some reservations about its ability to alter market dynamics when the new 7-inch tablet launches later this month.

"The Nexus 7 certainly looks like a nice piece of hardware, and the reviews have all been positive," Mainelli said. "The biggest question there is whether or not Google can get it into enough channels -- beyond the Google Play online store -- to make it a hit."

The Untouchable Factor

Mainelli noted that first-time buyers will really want to touch the device. "If they can't drive to a local retailer to test it out then I think they'll have a tough time gaining traction," he said.

Mainelli believes the Nexus 7's other weakness stems from the simple fact that the new machine's content ecosystem isn't as robust as that of Apple. "There aren't enough tablet-specific apps for Android, and Google's content collection isn't as deep," Mainelli said.

Furthermore, industry observers expect Apple to counter Google's latest move by launching a less expensive iPad in a smaller 7-inch or 8-inch form factor this autumn.

"I think there is plenty of demand for such a product both in the U.S. and in other countries," Mainelli said. "I also think that if Apple does a smaller, lower-priced tablet it would be to help bolster markets where they see big opportunities, such as education."

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