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Global research and consulting firm, Strategy Analytics said that it took 16 years for one in seven people to own and use the sophisticated little devices.
Scott Bicheno, from Strategy Analytics, said that Nokia remained a dominant force in the smartphone market since it introduced the world's first modern smartphone in 1996 for over a decade, until the iPhone forever changed the industry with its introduction in 2007.
"The iPhone revolutionised smartphone design and it catalysed industry growth," Bicheno said.
"By the third quarter of 2011, we estimate there were 708 million smartphones in use worldwide.
After a further year of soaring demand, the number of smartphones in use worldwide reached 1.038 billion units during the third quarter of 2012," he said.
One billion, however, is still a relatively small number in a world population of 7 billion, the report said.