Manufacturers gear up for biggest handset year ever


As mobile-phone makers gear up for what likely will be their biggest year ever, Motorola Inc., Sony Ericsson Mobile Communications L.P. and several other manufacturers kicked off the season with a glut of new, advanced handsets. Indeed, the pace is likely to quicken with CeBIT and CTIA Wireless just around the corner.

The impetus for such booming activity comes from predictions of a jumping market: Research and consulting firm Gartner Inc. just last week said it increased its 2004 phone-sales predictions to 580 million units, and Credit Suisse First Boston said the first quarter was shaping up to meet or exceed its global handset sales estimate of 137 million units.

Looking to cash in on the opportunity, Sony Ericsson released five new advanced GSM phones, including three for the Americas market. Specifically, Sony Ericsson introduced the tri-band GSM S700, which features a 1.3 megapixel integrated camera and a unique swivel-opening design. The phone also features Memory Stick, Bluetooth, Java and 3D gaming support, and should be available in the fourth quarter. The company also introduced the tri-band K700 camera phone, which includes 32 MB of built-in memory and support for 3D games.

For the Americas, Sony Ericsson plans to sell the Z500 clamshell camera phone, which supports push-to-talk services and EDGE networks. It is expected to sell in the Americas in the third quarter. The company’s new T637 will also feature PTT support and an integrated digital camera, and its lower-end T237 features a color screen. Both are scheduled for sale in the second quarter. Sony Ericsson also introduced a range of accessories, including a Bluetooth media viewer, Bluetooth headsets and two new EDGE PC cards for the Americas, Europe and Asia.

Interestingly, Sony Ericsson said its new devices represent the end of the company’s deal with Synergenix Interactive for its Mophun gaming platform. For several years Sony Ericsson had installed Synergenix’s Mophun platform in its phones to run games, but in recent phone releases the company began installing the Java platform alongside Mophun. Suzanne Cross, Sony Ericsson’s product marketing manager, said the company now will rely solely on Java technology, explaining that the new version 2.0 of Java includes all of the features the Mophun engine offered. By using Java, Sony Ericsson taps into thousands of available Java games.

Separately, Motorola unveiled three new advanced handsets designed for music aficionados, as well as a new content deal with MTV International to support the devices. Motorola’s new E398 offers an integrated MP3 player, SanDisk’s T-Flash removable memory, 3D stereo surround-sound speakers and an integrated digital camera. Motorola’s E680 handset also features 3D stereo surround-sound speakers as well as RealPlayer software, support for removable memory cards, Bluetooth, 3D graphics, MIDI background music and MP3 sound effects. Finally, Motorola’s C650 offers MP3 ring tones, an integrated digital camera, MPEG4 video playback, downloadable Java games and multimedia messaging. The C650 and E398 are scheduled for sale in the second quarter while the E680 is expected to ship in the second half of the year.

In conjunction with the release of the phones, Motorola also announced it will sell exclusive MTV content through its previously announced deal with the music channel. The deal covers areas outside the United States. Motorola said it will sell a series of interactive games known as Plastikulture, which will be preloaded onto the Motorola E398, C650, V220 and E680 in Latin America, Asia Pacific, Europe, Middle East and Africa, Motorola’s E398 handset in Europe and the model C650 in Asia and Latin America.

“Both (Motorola and Sony Ericsson) are finally getting more responsive to their customers,” said Richard Doherty, director of consulting firm Envisioneering Group. “They are not just being different to be different.”

Doherty said the new phones from Motorola and Sony Ericsson more directly meet customers’ needs and wants than the companies’ previous products. He said the companies are hoping to drive sales by focusing more closely on features, functions and usability rather than introducing new technologies.

“It’s pleasant to see these announcements reflecting consumers’ desires,” Doherty said.

The new releases also reflect the rapidly growing market for camera phones. Four of the five handsets Sony Ericsson introduced feature integrated digital cameras, and all three of Motorola’s new phones include cameras. Sony Ericsson’s Cross said the company’s primary focus this year will be “imaging.”

The focus on cameras comes as no real surprise. Just last week InfoTrends Research Group predicted that one in four phones sold this year will feature a digital camera. The firm said 150 million camera phones will be sold this year, and that the market will grow at a compound annual growth rate of 55 percent, eventually reaching an astounding 656 million units in 2008. InfoTrends predicted that camera phones will generate an additional 29 billion digital images this year.

“Growth in the camera-phone market creates new opportunities for many industry players, including handset vendors, wireless carriers, and digital photofinishers,” said Jill Aldort, senior research analyst of Internet imaging for InfoTrends. “More consumers are purchasing camera phones and experimenting with taking, sending and even printing photos. Camera phones have boosted slowing worldwide mobile-phone sales and photo messaging has contributed to an increase in data sent over the wireless networks. In turn, these circulating digital images have already added to the number of digital prints made.”

In other mobile-phone news, Verizon Wireless announced it will sell Kyocera Wireless Corp.’s SE47 sliding phone for $50 with a two-year contract. The phone is similar to one sold through Virgin Mobile. And disposable mobile-phone company Hop-on Inc. launched its latest phone, a dual-band GSM/GPRS device with a color screen. The company also offers a CDMA phone.

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