Android devices dominate the U.S. market, the latest Nielsen survey reports, investors are cautioned that Apple's iOS will soon pick up with the release of the iPhone 5.

Android has a 43 percent share of the smartphone pie in the United States, followed by Apple with a 28 percent share. RIM (BlackBerry) has an 18 percent share of the U.S. market for now, but that's quickly dwindling with only 9 percent of recent buyers having purchased a new RIM handset. So the main competition is between Apple iPhones and Android devices.

According to Nielsen, Apple has been at a steady No. 2 position in the smartphone market though the report stresses that things should change soon with the launch of a new iPhone.

Apple has invited reporters to an iPhone-related event next Tuesday.

In spite of continued economic concerns and high unemployment in the U.S., phone buyers are increasingly choosing smartphones over feature phones. To cash in, Apple may offer a midrange smartphone along with the release of the iPhone 5.

The cheaper iPhone, armored with powerful hardware, will be in a position to counter the Android devices that have inundated the market with low- to midprice smartphones.

The iPhone 5 is expected to run on the latest iOS 5 with 200 new features, including improved notifications system, news stand and iMessage. In addition to this, the iPhone 5 is anticipated to feature the new iCloud service in operating iTunes for wireless remote access of music from all computers and mobile devices.

With an new operating system, enhanced hardware and a probable midrange device, Apple is poised to step up the competition with Android.