Sales of mobile phone handsets which operate on Google's Android platform overtook sales of the iPhone at Carphone Warehouse last year.

The mobile phones retailer released third quarter figures, today revealing a surge in demand for smart phones over the Christmas period. Chief executive Roger Taylor said Carphone did not keep precise figures on how many phones were selling on either the Android or Apple platform, but added: "At some point in 2010 the Android overtook every other operating platform."

Some 75% of the phones Carphone sold over the three month period to 1 January 2011 were smartphones – a huge jump on the usual figure of about 50-60%, said Taylor, as people made moves to get their hands on the latest phone technology.

Analytics firm Nielsen estimates Android accounts for 40.8% of US Smartphone sales – against 26.9% for iPhone.

Taylor added that he expects smartphones to move into the pre-pay, or pay-as-you-go, sector this year. At present such phones are usually only sold through post-pay, or contract means.

Carphone reported revenues for Best Buy Europe, in which it has a 50% stake, of £1.03bn for the quarter. The level of connections was down over the same period, reflecting the fact that customers were taking out fewer but more lucrative smart phone contracts.The US business set up by Best Buy and Carphone Warehouse has exceeded expectations too, with new connections up by a third. Carphone said that it would make £90m-£100m from the US activities, up from its previous estimate of £85m-£95m.

Taylor said that the snow in December had probably cost the retailer up to 2% in lost sales, but that Carphone had decided not to report the impact separately.

Keith Bowman of Hargreaves Lansdown said: "Carphone will be pleased at the competition between the likes of Google and Apple. It only adds to interest from consumers in smartphones. Consumer demand for smartphones provided the core driver [for Carphone's results], with US sales derived via the group's newly formed venture with electrical retailer Best Buy being the main thrust. The UK business also played its part, to offset difficult conditions across Europe, while the launch of a UK online Best Buy presence provides hope for future prospects."

Carphone's shares rose 4.25p to 389.25p.

• Apple helped carve out a market for smartphones by launching the iPhone in 2007, encouraging consumers to explore the mobile internet through simple, attractive and customisable apps.

But it will be rival manufacturers who take that concept mainstream, and a fleet of phones powered by Google's Android mobile software is shaping up to lead the competition. For consumers, Android offers several key benefits – not least a choice of nearly a dozen full-featured smartphones selling for as little as £99. The cheapest Apple iPhone 4, without a contract, is £510. Apple's business is built around targeting a small but wealthy group of users, and with a strict approval system for the 300,000 apps in its store.

Google allows anyone to develop for Android phones without approval, meaning there are more low-quality apps among the more than 100,000 in the Android Marketplace. Clearing up that store, and making apps easier to find, will be a priority for Google. Jemima Kiss