Feature-Rich Devices Will Lead to Handset Market Recovery

date: May 13, 2002

Despite the turbulence of the past eighteen months there is much for the handset industry to look forward to. That is the message from a new report from wireless industry analysts ARC Group. After dropping to 385m units in 2001, ARC Group expects handset sales to recover slightly this year, reaching 430m. Beyond 2002 ARC Group predicts steadily improving market conditions and sales of 880m units in 2007.

One of the key reasons for such optimism is the arrival of feature-packed handsets to support 2.5G and 3G network launches. Given the importance of the replacement handset market in developed markets, this will compel users to upgrade their handsets. EMS, MMS, colour displays, Java and cameras will all encourage users to buy. Furthermore, such features enhance operators' data service offerings.

ARC Group consultant, Steven Hartley says, "After eighteen months of hard times, there appears to be light at the end of the tunnel. The handsets to be released in 2002 support an extremely impressive array of new features and users will certainly want to upgrade. Also, manufacturers are now leaner and more aware than ever of return on investment. This all makes for an encouraging outlook for the industry."

Nonetheless, challenges remain such as increasing functionality without compromising price, form factor or battery life. Given the complexity of these challenges, industry players need a clear assessment of the industry's future.

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last updated: January 12, 2004

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