• by Aaron Baar , October 26, 2010

"People from the feature phone world are finally migrating to the smartphone world. They're finding easier ways to do it and more compelling reasons to bring them over," ABI senior analyst Michael Morgan tells Marketing Daily. "The shipment of new devices far surpasses what we had two years ago."

People's love of smartphones continues unabated. According to ABI Research, nearly one in every five handsets shipped during the second quarter of 2010 was a smartphone -- up 12% from the second quarter of the year, and up 50% from the same period in 2009.

"People from the feature phone world are finally migrating to the smartphone world. They're finding easier ways to do it and more compelling reasons to bring them over," ABI senior analyst Michael Morgan tells Marketing Daily. "The shipment of new devices far surpasses what we had two years ago."

The astounding growth rates are largely attributable to falling prices for the devices themselves (which are often subsidized), tiered data plans and the success of the Android operating system, Morgan says.

"We're starting to see the emergence in the U.S. market of tiered data plans," Morgan says, concluding that "the price differential between a feature phone and a smartphone is irrelevant."

Now, it's time to wonder whether the market can sustain such growth. Already, there's concern that the phones -- particularly the iPhone and Android phones -- are sapping network capacity to the point where it creates another barrier to those who haven't already jumped on the bandwagon.

"I don't expect to see 50-60% growth in 2011; what I expect to see is 25% growth, which is still significant," Morgan says. The next opportunity for growth: prepaid carriers offering smartphones and plans.

For now, however, demand for the phones is steady. Apple shipped about 8.4 million iPhones in the second quarter (about 3 million of which were iPhone 4 models that came out only a few weeks before the quarter ended). The Q3 projections have iPhone shipments growing to roughly 14 million.