For calendar year 2012, Android and iOS combined for more than 87% of the 722.4 million smartphones shipped worldwide, up from 68% of the 494.5 million units shipped during calendar year 2011.

"The dominance of Android and Apple reached a new watermark in the fourth quarter," said Ramon Llamas, research manager with IDC's Mobile Phone team. "Android boasted a broad selection of smartphones, and an equally deep list of smartphone vendor partners. Finding an Android smartphone for nearly any budget, taste, size, and price was all but guaranteed during 2012. As a result, Android was rewarded with market-beating growth."
 

"Likewise, demand for Apple's iPhone 5 kept iOS out in front and in the hands of many smartphone users," added Llamas. "At the same time, lower prices on the iPhone 4 and the iPhone 4S brought iOS within reach of more users and sustained volume success of older models. Even with the Apple Maps debacle, iPhone owners were not deterred from purchasing new iPhones."

The two-horse race between Android and iOS has collectively accounted for more than 50% share of the smartphone OS market over the past two years. At the same time both BlackBerry and Microsoft have been working on competing platforms that have recently launched and are poised for competition. Microsoft launched Windows Phone 8 in 4Q12, and BlackBerry more recently released BB10 in January, marking the first time two new platforms have been introduced to the smartphone space in the past several years.

"With the recent introductions of two new smartphone platforms we expect some ground to be made by the new entrants over the coming years," said Ryan Reith, program manager with IDC's Mobile Device Trackers. "There is no question the road ahead is uphill for both Microsoft and BlackBerry, but history shows us consumers are open to change. Platform diversity is something not only the consumers have asked for, but also the operators."

Smartphone Operating System Highlights

Android continued its overall upward trajectory, reaching triple-digit growth for the year. Samsung was the biggest contributor to Android's success, amassing 42% of all Android smartphone shipments during the year. Following Samsung was a long list of vendors with single digit market share, and an even longer list of vendors with market share less than one percent. The intra-Android competition has not stifled companies from keeping Android as the cornerstone of their respective smartphone strategies, but has upped the ante to innovate proprietary experiences.

iOS posted yet another quarter and year of double-digit growth with strong demand for the iPhone. However, iOS's year-over-year growth has slowed compared to the overall market. The smaller volumes during 2Q12 and to a smaller extent 3Q12 underscore the possibility for a mid-year iPhone release in order to maintain market-beating growth. Speculation about the release of possible larger-screen and inexpensive models during the middle of 2013 continues to follow Apple, which would help sustain growth. But until any model is formally announced, speculation remains simply that.

BlackBerry's decision to postpone the release of BB10 to 2013 left the platform vulnerable in 2012 and reliant primarily on older smartphones running on BB7. As a result, BlackBerry's tight grip on enterprise users has loosened and its popularity within emerging markets has been diminished by the competition. Now that BlackBerry has unveiled BB10, the company is faced with migrating current BlackBerry users to upgrade while persuading smartphone users of other platforms, including previous BlackBerry users, to switch.

Windows Phone/Windows Mobile made market-beating progress in 4Q12 and 2012. The addition of Nokia's strong commitment behind the platform was the key driver in Microsoft's success. At the same time, the relationship has benefited Nokia, which amassed 76.0% of all Windows Phone/Windows Mobile smartphone shipments. Beyond Nokia, however, is a short list of other vendors who have been experimenting with Windows Phone while also supporting Android.

Linux has remained essentially flat from the previous year, with longtime supporters NEC and Panasonic moving to Android and newcomers K-Touch and Haier making up the difference. Linux will bear close observation in 2013 as new smartphones from SailFish, Tizen, and Ubuntu are all scheduled to launch this year. Still, these new Linux-powered operating systems will require time and investment to gain momentum in the market, making for a slowly growing trajectory.