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Summary:

If you’re not ready to bid farewell to the feature phone just yet, you might want to start preparing your goodbyes. Nielsen today said that by the end of 2011, smartphones will overtake feature phones up from a mere 10% in early 2008.

If you’re not ready to bid farewell to the feature phone just yet, you might want to start preparing your goodbyes. Nielsen today estimates that by the end of 2011, smartphones will overtake feature phones in the U.S.. One in two Americans will have a smartphone by Christmas of that year, Nielsen forecasts, compared to just one in 10 in the summer of 2008. I blame the iPhone, but there are plenty of culprits to point out — superphones packed with with more features than you can fit in a stocking over the fireplace.

According to the data, it took six quarters for the U.S. smartphone market share to double, moving to 21 percent of handsets sold from just 10 percent in early 2008. Nielsen expects acceleration of that growth rate due, which makes sense due to increased application availability, better native features and the declining prices for smartphone devices. These more capable devices are sure to increase the demand for mobile broadband infrastructure, but U.S. carriers ought to be happy with this situation. Mobile broadband plans for smartphones help generate higher ARPU through the data service, which offsets decreased ARPUs on the voice side.

By Kevin C. Tofel

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  1. the new stat that is needed is how many of these will be of the superphone variety (who will really load the network) vs the blackberry. The RIM phones are still selling very well but it is hard seeing them as resulting in the user use of applications causing as big a load on the network as the superphone varieties.

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  2. This seems aggressive to me. The low-hanging fruit for smartphones are already largely there – once you start to try to get into the older demographics – remember – baby boomers represent a huge chunk of the population – I think the penetration will decelerate, but they show it accelerating.

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  3. I agree with the other guys—not totally buying the vast smartphone adoption, at least not until data rates come way down.

    Most owners of feature phones have one, not because they don’t like smartphones, but because they can’t afford to or don’t want to pay the $30-$40 per month data fee, which carriers will likely only increase.

    Why do you think the iPod Touch is so popular? You get many of the iPhone features and Wifi, but without the carrier contract.

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  4. Not necessarily… This study does not prove anything about the American population as a whole. It is only talking about the people in America who own cell phones. You cannot assume that everyone owns a cell phone. Most recent estimates say that around 20% of Americans do not own one.

    That being said, this prediction by Nielsen seems to be in line with most others about how many cell phone owners will be using smartphones. However, the most influential factor (in my opinion) will be the cost of a data plan. If this cost doesn’t come down, I wouldn’t expect 50% of cell phone owners to be using smartphones in the US by the end of 2011.

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  5. I think smart phone adoption in the U.S. will peak over the course of the next 30 months. There will be more competition between the big cell phone providers as they jockey for increased market share. Good deals for everyone, at least for a little while.

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  6. guys, read the linked Nielsen article.
    “45% of respondents to a Nielsen survey indicated that their next device will be a smartphone.”
    is the stat that sets up their argument.

    @Michael Wolf. Baby Boomers are some of the biggest purchasers of smartphones right now. Remember they have plenty of disposable income and like to think of themselves as ‘with it’. They will buy a smartphone even if they don’t use the data just so they can look good.

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  7. 1 out of 2 ?
    That’s all those who don’t have a foreclosure house?

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  8. The difference is what people say vs. what people do.

    Just look at this piece from Computerworld:
    http://tinyurl.com/yb54nfc

    AT&T’s own findings show that people say they want a smartphone, but when faced with actually paying for the phone and data plan, they opt for a feature phone.

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  9. [...] 1 in 2 Americans Will Have a Smartphone by Christmas 2011 [...]

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