Last year, Nielsen (NLSN) went out on a pretty sturdy limb and insisted that smartphones would be the telephone standard by now. As much as AT&T (T), Verizon (VZ) and Sprint (S) have tried to tilt that balance of power, a market full of flippers and sliders still had enough to say in their defense to fill a bill's worth of anytime minutes.
This summer, Nielsen had to backtrack on that estimate after smartphones held only 40% of the market. Market research group ComScore (SCOR) said even that was an overestimate and measured smartphones' share at a wee bit skinnier 35%. What gives?
"You will always have some people who don't want to or cannot have that capability for business reasons," Entner says. "There are places of work that prohibit you from having a device in it that has a camera for corporate or government espionage, so what do you do with these people? Those are the remnants of where smartphones can't go."Those spurning the smartphone are still getting plenty of support in doing so. According to ComScore, the largest shares of the combined smartphone and feature phone market don't belong to Apple, Research In Motion (RIMM) or Android darling HTC, but Samsung (25.5%) and LG (20.9%). Those companies have managed to step into smartphones without hanging up on lesser models. That's probably the smartest move a phone manufacturer can make right now. Judging by ComScore and Nielsen numbers, smartphones won't grab 50% of market share until late next year at the earliest. Nielsen's also found that, of late adopters who haven't switched to a smartphone, 30% aren't even sure if they want to make the jump or which OS they'd want to buy if they did. Smartphone owners can play around with their apps all they'd like, but there's going to be a subset of texting and talking feature phone owners for a long while. "At the major carriers, 70% to 80% of what they're selling are smartphones and in the overall market, including prepaid, it's north of 50%," Entner says. "Within two years, every major carrier will have about maybe two feature phones left."
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