Strategy Analytics said global smartphone shipments grew 38 percent annually to reach 217 million units in the fourth quarter, to bring annual sales to 700 million.
Android, the free operating system developed by Google, grabbed 70 percent of the market in the final three months of the year, while Apple's iOS used on its iPhone held 22 percent.
The news bodes ill for rivals like BlackBerry maker Research in Motion, which is launching its new platform this year, and Microsoft, which is pushing its Windows Phone system.
"Android is clearly the undisputed volume leader of the smartphone industry at the present time," said Strategy Analytics executive director Neil Mawston.
"Android's challenge for 2013 will be to defend its leadership, not only against Apple, but also against an emerging wave of hungry challengers that includes Microsoft, Blackberry, Firefox and Tizen."
The survey noted that global shipment growth slowed from 64 percent in 2011 to 43 percent in 2012, as regions such as North America and Western Europe matured.
Scott Bicheno, analyst at Strategy Analytics, said the latest trends showed "the worldwide smartphone industry has effectively become a duopoly as consumer demand has polarized around mass-market Android models and premium Apple designs."