Google's Android system was used on 70.1 percent of smartphones shipped in the quarter, while Apple held 21 percent, according to research firm IDC.
"The dominance of Android and Apple reached a new watermark in the fourth quarter," said IDC analyst Ramon Llamas.
Over the full year, this gave the two platforms 87.6 percent of the world smartphone market, and underlined the challenge facing smaller players in trying to break their dominance.
Llamas said Android benefitted from "a broad selection of smartphones, and an equally deep list of smartphone vendor partners" while Apple got traction from its new iPhone 5 and lower prices on its older models.
IDC said the global market for smartphones grew 46 percent last year with 722 million units shipped some 227 million of them in the fourth quarter alone.
The report highlighted the tough task for other smartphone vendors, including BlackBerry and those using the Microsoft Windows Phone platform.
BlackBerry remained the number three platform but its market share slid to just 3.2 percent in the fourth quarter, and 4.5 percent for the year. That compared with 10.3 percent for 2011.
The Windows Phone platform grew some 150 percent year-over-year in the fourth quarter, helped by the introduction of the Windows Phone 8 platform and new models from Nokia and HTC.
But the platform accounted for just 2.6 percent of the market in the fourth quarter.
"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, another IDC analyst.
"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."