June 3 2003

The lack of Universal Mobile Telecommunication System (UMTS) handsets that has plagued the launch of third generation Wideband Code Division Multiple Access (WCDMA) networks, is no longer an issue, according to In-Stat/MDR (http://www.instat.com).

The high-tech market research firm reports that, as operators are poised to launch new networks across Europe in coming months, several manufacturers have deployed (or are about to) new devices, and supplies should be ample, if not plentiful.

The next hurdle to 3G deployment will be user acceptance. Other hurdles include:

• Handset testing that involves more than 1,000 different parameters before commercial viability (compared with 300 for traditional phones)
   
• Voice call handovers between older networks and UMTS systems are still not smooth, and will require more fine-tuning to reduce dropped calls
   
• Handset software glitches (like the one that hit NTT DoCoMo's FOMA T2101V handsets earlier this year where incoming calls were missed when the phone was in energy-saving mode)

However, In-Stat/MDR predicts these problems will be overcome, and handset supplies will begin to build to significant levels starting this year. One of the key drivers will be the launch by Hutchison Whampoa of its "3" networks across the European continent, first in Italy and the United Kingdom, and later in other countries.

In-Stat/MDR expects about 2 million UMTS handsets to ship next year, based on announced orders. That figure could climb somewhat, if Hutchison's networks get a positive response and economic conditions improve.

But an increase is unlikely given high handset prices, and uncertain market conditions. However, as the advanced phones gain favor among mobile professionals and early-adopters, these devices will carve out a solid niche in years to come.

This Market Alert is drawn from the In-Stat/MDR report, "Turbocharged Handsets: The Real Story on UMTS (WCDMA) Phone Availability" (#IN020513WH), which outlines which manufacturers have deployed (or are about to) the speedy new devices that meet the Universal Mobile Telecommunication System (UMTS) standard for data services. The report also addresses why supplies should be ample in 2003, how many units will ship next year, what models to expect from various vendors, what challenges vendors and carriers face and what the long-range shipment forecast is. In addition, the report also gives insight into Hutchison Whampoa's 3G push across Europe, and the related UMTS handset moves with supplier (and partner) NEC. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/cat-wh.htm or contact Rick Vogelei at 480.609.4533; rvogelei@reedbusiness.com. The report price is $1,995 USD.
 

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