DUBLIN, Ireland-Beleaguered multimedia software vendors and handset manufacturers alike face at least another six months of difficult market conditions, according to new research. The research also offers predictions of flat growth in cellular handsets through 2002 as a result of slow rollout of multimedia messaging service (MMS) handsets and services and uncertainty around pricing structures for these services.
Handset vendors are contributing to their own problems by placing too much emphasis on entry-level phones and not offering sufficient choice in top-range handsets, according to Chris Ambrosio, director of Strategy Analytics’ Global Wireless Practice. “With a slow rollout of EMS (enhanced messaging service) and MMS services and carriers’ inability to subsidize entry-level products, both sales and replacement rates will remain flat in 2002,” Ambrosio said.
“Replacement sales will account for over 70 percent of new handset sales this year and any stumble in the services/handset/applications chain will affect growth,” David Kerr, vice president, added. “On the positive side, MMS services and handsets will be available in volume in 2003, and we expect replacement rates to move upward toward 40 percent by 2007.”
