New Additions + Targeted Segmentation = 900M+ Cellular Handsets in 2006

ABI: The mobile handset market looks set to take a curious path over the next year as it is fuelled by two distinctly different forces. On one hand, the growing segmentation of saturated markets has prompted a rise in replacement rates. On the other hand, new subscriber additions in emerging markets continue to add to the baseline. Looking at developed markets, it is apparent that market segmentation has gathered pace and the blurry lines between segments are beginning to solidify. The rise of the slimphone is a good example of the growing segmentation along less traditional lines. The success of Motorola's RAZR has spurred a whole new segment aimed at high fashion and slim design that looks set to realize product shipments in excess of 200 million by 2008. The coming year looks set to be another strong one for net additions in growing markets although net additions-related handset shipment contributions are starting to slow. Manufacturers are increasingly bullish on prospects for the year and are all aiming for strong performances. The market in 2006 will be fuelled by 3G and low cost handsets, and manufacturers addressing both of these segments look set to gain share. Handset Market Segmentation — The Rise of the Slimphone Publ 20060418