3G phones taking market share

The new technology is gaining a growing foothold in the market, but business users are still less than keen
Written by Jo Best, Contributor

Despite its rocky start, 3G could yet turn out to be both popular with consumers and telcos alike, with analysts predicting third generation technology will drive the handset market as shoppers scrabble to get the latest in cutting edge devices.

Analyst house IDC predicts that the market for mobiles in Western Europe will grow at a rate of 12 percent over 2005, with both 3G and smartphones slated to do particularly well in the coming months.

Third generation phones have already benefited from the operators' end-of-year launch spree coinciding with Christmas shopping, with a healthy fourth quarter bringing the number of 3G handsets sold in 2004 to 144 million.

WCDMA3G phones are now expected to make up 13 percent of all phone shipments during 2005, according to IDC.

However, despite warnings the buying spree is being driven largely by average shoppers rather than the business segment, with most operators only offering the Nokia 6630 as a token gesture towards a third generation smartphone.

Andrew Brown, programme manager for mobile devices at IDC, said the notable absence of 3G phones in operators' line-ups is proof that businesses just don't see the need for 3G devices, adding that currently there are more smartphones that come equipped with Wi-Fi capability than with 3G technology.

3G or not, smartphones are set to make a small but very significant jump in market share during this year, from four percent to over six percent.

The rate of growth for the smartphone market is set to outstrip that of standard mobiles, IDC predicts, with year-on-year growth rates of 40 percent for converged devices in 2004, compared to 18 percent for standard mobiles.

2005 will see that growth rate rise to 70 percent, the analysts believe.

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