According to recent research from Strategy Analytics, cellular handset sales will remain flat in 2002 as slow rollout of MMS handsets and services and uncertainty around pricing structures for these services drags down growth. 110 million handsets will be sold in Western Europe in 2002.

Chris Ambrosio, Director of Strategy Analytics Global Wireless Practice notes, "Handset portfolios are heavily weighted to entry-level feature sets and fail to offer a compelling range of choice in the mid, high, and premium product categories.

With a slow rollout of EMS/MMS services, and carrier's inability to subsidize entry-level products, both sales and replacement rates will remain flat in 2002."

David Kerr, VP of Strategy Analytics Global Wireless Practice adds, "Replacement sales will account for over 70% of new handset sales in 2002. With such high penetration, any stumble in the services/handset/applications chain will affect growth.

On the positive side, MMS services and handsets will be available in volume in 2003, and we expect replacement rates to trend upwards toward 40% in 2007."

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