Cell Phone Handset Sales Slowing

Consumers are continuing to buy new cell phones at a record pace in 2005, the fourth year in a row that sales will reach record levels according to a study by market research firm In-Stat. While sales in terms of volume are at record levels, percentage-wise only a 6 percent increase in sales is expected overall. This is down from the double-digit gains seen over the past few years.

"The slowing pace is a result of some mature markets at, or near, full penetration, and weaker-than-expected growth in some emerging ones," says Allyn Hall, Director of Wireless Research. "It's a sign of a maturing industry."

The top five handset makers -- Nokia, Motorola, Samsung, LG, and Sony Ericsson -- still control 80 percent of sales wordwide according to the report.

Emerging markets like India have shown slower growth than was initially anticipated, and 3G sales in Europe are somewhat disappointing. However, the increase is slightly ahead of earlier estimates, as there was less of a slowdown than expected according to senior analyst David Chamberlain.

Other emerging markets like China and Eastern Europe continue to drive handset sales however. Worldwide, handset revenue is expected to reach $112 billion in 2005.

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