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Camera-phone market set to double by end of year

LONDON - The camera-phone market is set to double in size by the end of the year, according to a report by wireless industry analysts ARC Group.

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In its Future Mobile Handsets 2003-2008 report, ARC estimates that by the end of 2003 more than 55m consumers worldwide will own camera-phone handsets, more than doubling from the 25m mobile units sold in 2002.

For the UK and many other mature markets worldwide, the growth will come from existing mobile phone users as they are encouraged by handset manufacturers and network operators to replace their handsets with more feature-rich models, a turnaround from a few years ago when the emphasis was on the first-time buyer.

David McQueen, ARC Group's senior consultant and author of the report, said: "This year we have seen a massive growth in camera-enabled phones, with 15% of handsets worldwide featuring built-in cameras or designated camera accessories."

He added: "Tempted by innovative design features such as rotational cameras and swivel screens, along with the advent of multimedia messaging, colour displays and polyphonic ringtones, we'll see many consumers upgrading their mobile phones this Christmas."

The ARC Group study into the future of mobile handsets predicts that by 2005, 130m handsets with camera capability will be shipped globally and, with the additional boost of 3G rollout, this figure is expected to increase to 210m by 2008.

"Globally, the Asia Pacific region will continue to lead the way, but Europe is expected to improve its market share through the continued take-up of mobile messaging services and with operators promoting attractive services such as Vodafone's Live! service," McQueen said.

ARC Group predicts the entire mobile handset market to grow by 10.3%, with consumers buying 444m mobiles by the end of 2003, up from 402m in 2002. This trend is set to continue for the next five years, with handset sales forecast to reach 689m by 2008, in line with subscriber growth.

"Despite continued delays to 2.5G and 3G network roll out in the early part of 2002, there was distinct expansion by the end of the year, and the market in 2003 has since staged a comeback," McQueen said.

While this is encouraging news for the mobile industry, the Future Mobile Handsets report advises that as the market evolves, major challenges will still continue for handset manufacturers.

"The challenge for the mobile handset market is to find the right balance between device costs, performance and style. Handset manufacturers must be able to differentiate themselves from the competition by carefully understanding the consumer groups they are targeting and identifying key markets for future growth. Consequently, branding and a heightened end-user focus will become crucial for new entrants and the major players," McQueen said.

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