Multi-feature mobiles catch consumer interest

A report predicts that consumers will flock to buy new mobile phones in the latter half of the year, lured by picture messaging, colour screens and low prices to lure them

The worldwide mobile phone industry is now back on its feet, and new products and services will lead to a sales rebound late this year, predicts a new report.

Gartner Dataquest's study of second-quarter mobile phone sales found that sales totalled 98.7 million units, a 0.8 percent increase from the same period last year. But this figure disguises other signs that the industry is positioned for stronger growth, the research company said, predicting 5 percent growth for the full year.

Key to increased sales will be a slew of new product lines embracing colour displays and new features such as built-in cameras and picture messaging, Gartner said. What's more, these devices are being priced to encourage entry level buyers, as well as those looking to upgrade their existing handsets.

Telecoms operators, for their part, are heavily publicising services such as picture messaging, also known as Multimedia Messaging Service (MMS), that use the new handsets. "Many of these services... may serve to augment operator revenue from across a mature subscriber base while simultaneously acting as a catalyst for replacement sales," said Gartner's Bryan Prohm, senior analyst with the Mobile Communications Worldwide research group, in a statement.

The combination of new features and new, low-priced handsets will add up to a strong fourth quarter for mobile phone sales, Gartner believes, and may even trigger network operators to offer low-priced prepaid packages. "We continue to believe that worldwide mobile terminal sales to end users will reach approximately 420 million units in 2002," stated Prohm.

On a deeper level, this year the industry has managed to eradicate the huge inventory problems that plagued it in previous quarters, a hangover from unrealistic sales expectations in the late 1990s. This was achieved thanks in large part to huge demand in fast-growing parts of Asia and the Middle East, Gartner said.

Nokia maintained its dominant position in the second quarter, with 35.6 percent of the market and sales of roughly 35 million units. Motorola followed as a distant second, with 15.7 percent of the market and about 15.4 million units sold. Samsung showed the strongest growth out of the top three, however, increasing from about six million units sold in the first quarter to about nine million units for the second quarter, and taking 9.5 percent of the second-quarter market.

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