Electronic Design

Mobile Phones Promise A Slew Of Innovations

Worldwide mobile-phone shipments in 2003 surged to 519 million units, up 18.4% from 438.5 million in 2002 (Fig. 1). This surge in mobile-phone shipments exceeded even the most optimistic forecasts for the year.

The increasing demand for mobile phones with cameras and color displays, first in Asia and later in the West, represented a significant factor behind the robust rise of handset sales in 2003, according to Dale Ford, vice president of market intelligence services for iSuppli. Camera-enabled phones are taking the market by storm, growing from 6% of all handsets made in 2002, to 16% in 2003, to an estimated 32% in 2004, and to a projected 65% in 2007, he adds.

Aside from requiring the addition of an image sensor and supporting components, camera-enabled phones necessitate color displays. This boosts the usage of color super-twisted-neumatic (STN) LCDs and even some of the AM-TFT LCDs in mobile handsets. Such displays cost more than the monochrome STN-LCD screens that prevail in mobile phones.

Color displays were shipped in 36.8% of mobile phones in 2003, and will rise to 57.7% in 2004 and 95% in 2007, Ford predicts. Figure 2 shows the forecast for the penetration of cameras and color displays in mobile phones.

The starting gun for the present wave of innovation in mobile phones fired in early 2000, when the first products compatible with the 2.5G and 3G wireless standards entered the market. After a bumpy start, new features began to multiply in 2002, including products with cameras, color screens, multimedia messaging service (MMS), and video games. In 2003, demand for some of these phones, particularly the camera-enabled models, began to explode as sales expanded outside of Asia.

The features-driven rise in sales came at a time when mobile-phone sales growth was slowing due to the high penetration of wireless handsets. Unit shipments rose 18.4% in 2003. But that was far below 2000's 42% growth and 1999's 64% rise. Replacement sales, not new subscribers, are now the main contributors to growth in the mobile-phone market.

Events in 2003 showed that compelling features are the key to selling new phones to existing users. "The boom in mobile phone sales in 2003 clearly demonstrated that consumers respond to exciting new features," says Ford. "This lesson hasn't been lost on the wireless carriers and the mobile-phone makers, and we expect to see manufacturers introduce and promote features at an accelerated pace in the future."

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