Most wireless phones to be smartphones by 2011, Nielsen says

21% of wireless subscribers had a smartphone at end of '09

With all the attention on smartphones, especially the iPhone and the Droid, it might seem odd that only 21% of U.S. wireless phone subscribers were using a smartphone at the end of 2009.

That's the finding of a recent Nielsen survey and analysis reporting that smartphones are catching on fast and will represent the majority of all wireless phones by the end of 2011.

Smartphones will also account for about 35% of all wireless phones in the U.S. by the end of 2010, according to a blog on NielsenWire.

The findings are a reflection of a Nielsen survey of 75,000 wireless users and the phones they said they plan to buy, but the figures also take into account the falling prices, the increasing functionality of smartphones and an "explosion" of applications for the devices, said Roger Entner, a Nielsen analyst.

"We are just at the beginning of a new wireless era where smartphones will become the standard device consumers will use to connect to friends, the Internet and the world at large," Entner said, noting that 45% of the survey respondents indicated that their next device would be a smartphone.

The Nielsen findings seem somewhat at odds with the recent trend among major U.S. carriers to sell cheaper phones that emphasize text messaging and don't have the processing power or storage to serve up applications the same way a smartphone can.

For example, at CTIA last week, AT&T officials touted a wide variety of new quick-messaging devices, noting that about 35% of their subscribers have a smartphone (including the iPhone), but many users want a less expensive phone and will put up with less functionality than that offered by a smartphone. Even so, Nielsen expects continued growth with smartphones.

The company found that slightly more males buy smartphones than do females, by 53% to 47%. That difference is not nearly as large as is reflected by crowds that show up for first-day sales of smartphones at Apple stores and for various carriers, where men easily outnumber women by nine to one.

Nielsen also found that Hispanic Americans and Asians are slightly more likely to have a smartphone than would be expected based on their overall population in the U.S., which Entner called a "trend we see in the adoption of other mobile data services." The Nielsen survey also found that 66% of smartphone buyers get them for personal use, as compared to business use, which somewhat contradicts the trend of more companies authorizing their users to buy smartphones for both business and personal usage.

In addition, Nielsen reported that in the past six months, 77% of new smartphone buyers remained loyal to their previous wireless carrier, while only 18% switched to a new provider to get a smartphone. Entner said the percentage of those who switched carriers to get a new smartphone was no higher than the average of all wireless subscribers who switched.

Wi-Fi on a smartphone was seen as a big reason to own a smartphone by half the respondents, since they use the faster network to quickly download applications and content.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

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