WORLDWIDE HANDSET SALES TO REACH 491 MILLION UNITS IN 2001.(Industry Trend or Event)

In a new study being offered by Global Information Inc., Future Mobile Handsets --Worldwide Technology and Market Developments 2001-2006, ARC group predicts that total handset sales will reach 491 million units in 2001, an increase of about 86 million from sales in 2000.

Forecasts published by vendors and analysts over the last 6 months vary greatly, with some forecasting as few as 350 million handsets sold to customers in 2001. This is a reflection of the level of impact the situation has had on various players (within the handset manufacturers but also along the value chain) coupled with global market conditions pushing some analysts and vendors to publish some extremely conservative forecasts for 2001. However, this carries the risk of `talking down the market' and could impact the medium term outlook, in particular the production capacity of some component manufacturers.

Early last year, when ARC announced forecasts that sales for 2000 would reach 410 million units, many industry executives in the market felt such projections were pessimistic, with some forecasts up to 550 million units. This year when 2000 sales were reported by handset manufacturers, sales stood at around 405 million units... less than 2% off the `pessimistic' forecasts published in January that year. 2001 we will undoubtedly be labeled as `optimistic'.

Q3 and Q4 handset sales should be favorable in 2001 and lift significantly the relatively poor results observed in Q1 and Q2 in some regions. Also, the slower renewal rate observed in recent months is due to a weak handset offering to the end customer, which in turn is partly due to delays in GPRS handsets not yet being available. It is not seen as an underlying trend and expect a significant increase in renewal later this year in regions like Europe.

Global Information Inc. (GII) -- specializing in market research provision for the telecom and IT industries, GII offers expert independent recommendations of publications from over 100 of the globe's leading market research firms. With offices in the US, Singapore and Japan, GII serves telecom and IT industry professionals around the clock, and provides support in English, Korean, Chinese and Japanese.

For more information on this report, contact an account executive via e-mail info@gii.co.jp or visit the GII website http://www.gii.co.jp/english/ar6997_future.html.

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