Booming US Smartphone Market Ripe for Radical Departures

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In its 4Q11 results, AT&T reported that 82 percent of phones sold to new or existing contract customers were smartphones. At Verizon Wireless, the corresponding figure was 70 percent. Sprint has indicated that 86 percent of phones sold to contract customers in 4Q11 were smartphones.

Strong sales at the top three US operators are driving a steady increase in the proportion of contract customers in the US who now use smartphones. Sprint leads the way, with 66 percent of its contract customers using smartphones in 4Q11. AT&T follows at 57 percent, with Verizon trailing at 44 percent. T-Mobile USA's 3Q11 figures noted that 10.1 million, or 30 percent of its customers, were smartphone users.

iPhone variants dominate the US smartphone market, accounting for 81 percent of AT&T's smartphone sales during the quarter. We estimate that 55 percent of Verizon's smartphone sales and 39 percent of Sprint's smartphone sales in 4Q11 were iPhones.