June 30, 2011, 3:17 PM

More consumers turn to smartphones rather than feature phones

And the iPhone is stealing some of Android’s thunder, The Nielsen Co. finds.

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Smartphones running the Android operating system continue to dominate the market.

A country where the majority of mobile phone users own a smartphone is inevitable based on the rapid growth of smartphone adoption, The Nielsen Co. predicts. And that means there will be a horde of consumers with high expectations of retailers and other organizations, expectations for mobile-optimized web sites and mobile apps.

According to the latest Nielsen data on smartphones, the pace of adoption continues to ramp up. In May, 38% of consumers with mobile phones owned a smartphone, the research firm says. That figure was 19% in the third quarter of 2009 and 31% in Q3 2010. Nielsen projects by the end of this year half of mobile phones in use will be smartphones.

The trend is bolstered by research that shows 55% of consumers who purchased a mobile phone in the last three months bought a smartphone compared with 45% who bought a feature phone, the predecessor to smartphones that can enable web access but are much less powerful and typically don’t run mobile apps.

Android continues to be the most popular smartphone operating system—38% of consumers with smartphones own an Android device, Nielsen finds. It also leads among consumers who recently bought a new smartphone. However, Apple Inc.’s iPhone has recently shown the most growth.

In February, 27% of consumers buying a mobile phone went with an Android; the figure stayed the same in May. In February, 10% of consumers purchasing a new mobile phone went with an iPhone; that number jumped to 17% in May. Verizon launching the iPhone on its network earlier this year could account for a big chunk of that increase. For the same time period, BlackBerry went from 11% to 6%, Windows Phone 7 stayed flat at 1%, and other smartphones, including those running HP WebOS (formerly Palm), went from 5% to 4%.

Android remains the leader with 38% of smartphone market share, Nielsen says. It is followed by the iPhone with 27%, BlackBerry with 21%, Windows Mobile with 9%, Symbian with 2%, HP WebOS (Palm) with 2%, the older Palm OS with 1%, and Windows Phone 7 with 1%. The total exceeds 100% due to rounding.

“What we were talking about a year or two ago as on the horizon is now here. The consumer has adopted this technology faster than anyone could have predicted,” says Steve Rowen, managing partner at consulting firm Retail Systems Research. “And smartphone consumers have demands. They don’t want to get to a retailer’s site and have a clunky experience or not find a store locator. Retail moves at a slower pace than other industries and there still is some disbelief about how consumers are using these devices. If a retailer doesn’t have someone in charge of making sure their customer experience is seamless across mobile and other channels, they’re in for a rude awakening.”

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