Handset Sales Growth Slowing, But Still Pretty Torrid

Third-quarter mobile phone sales grew by 22% over 2004, still showing solid growth, albeit slightly lower than last year's 26% jump. Still, sales aren't slowing quite as much as some had predicted, but it's low-cost mass-market handsets in emerging markets that are driving sales -- not expensive, high-margin devices in mature markets. That's hardly a surprise as penetration keeps going up, with the figure for Europe as a whole expected to exceed 100% in the next year or so. And while the Christmas season should deliver bumper handset sales, 3G phones will likely still remain just a small part. While it's debatable that 3G phones are still "clunkier" than 2G phones, as the article asserts, the real factor is cost. 3G handset prices are falling, but typically still come in quite a bit higher than most previous-generation devices. Until it's cheaper for consumers to upgrade, many users will just hold on to the phone they've already got.

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