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3G, Other Market Trends Challenge Handset Component Makers

19th October , 2005

US : Wireless handset component makers are scrambling to support some challenging market trends including the proliferation of 3G services, reports In-Stat. By mid-2005, the number of 3G subscribers (CDMA2000 1X EV-DO & WCDMA) exceeded 50 million, the high-tech market research firm says. The rollout of 3G services has created pressure for carriers to earn cellular data revenue, and has spawned a multitude of cellular devices of every shape and size, and with almost every feature possible.

"3G networks have made 2005 an exciting time for subscribers and a trying time for handset and component makers," said Allen Nogee, In-Stat analyst. "Carriers have spent billions to get their data networks off the ground; they have become desperate to start getting some payback."

A recent report by In-Stat found the following:

-- Price pressures are accelerating. GSM handsets have hit the $30 level, and the push is on for $20. WCDMA handsets, most of which also support GSM, remain expensive, but prices are dropping fast.

-- Chip counts are dropping. Although both Intel and TI have long talked about their visions for a "one-chip" handset, now all chipmakers see the need to get handset chip counts down as fast as possible, especially for low-end handsets.

-- Memory is growing greatly. Handsets are being made with larger and larger sections of flash memory, and some handsets have removable memory cards. Cellular carriers realize that subscribers won't buy songs and applications if they have no place to store them on their handsets.

The report, "The Little Device That Could: A 5-Year Handset Component Forecast" (#IN0502111WH), covers the global market for wireless handset components. It includes extensive analysis of trends driving the market, and five-year unit, revenue, and ASP forecasts for multiple component categories. It also contains analysis of key vendor announcements and trends.

For more information on this report, please visit: http://www.instat.com/catalog/Wcatalogue.asp?id=3 or contact Erin McKeighan at 480-609-4551 or emckeighan@reedbusiness.com. The report price is $3,495.

About In-Stat

In-Stat (www.in-stat.com) is the leading provider of actionable research, assessments and market forecasts of semiconductors and advanced communications equipment and services. Our forecasts, analysis, and insights are derived from both a deep technology understanding and a unique research methodology, which examines each segment of the value chain for each market. Technology vendors, service providers, technology professionals and market specialists, worldwide, rely on In-Stat's tenured, experienced staff and in-depth research to support critical technology, product and success decisions.

In-Stat is a strategic segment of the $8 billion Reed Elsevier global information network, with access to an expansive worldwide electronic network, extensive technology databases and well-informed personnel. In-Stat analysts gain exceptional insight into geographic marketplaces and specific technologies within markets such as electronics, cable and wireless. As a member of Reed Business Information, In-Stat is a division of the largest business-to-business publisher in the United States.

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