By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Multihandset cellular households and camera phone households are more common than United Nations scandals, according to multiple research studies.
Studies by Forrester Research, Strategy Analytics, the Rechargeable Battery Recycling Corporation (RBRC) and the Telecommunications Industry Association (TIA) underscore cellular's increasing penetration among U.S. households, the growing number of households with multiple handsets, and the proliferation of camera phones.
"The wireless market continues to defy predictions that it is approaching its saturation point," said Forrester's analyst Charles Golvin. In a survey of 5,600 households, Forrester found that in 2004, two-thirds of U.S. households owned at least one cellphone and that the majority of cellular households have at least two handsets. The number of households with four or more cellphones grew by 57 percent over the previous year, the survey also found.
In breaking down penetration rates by age group, Forrester found that people in the 18- to 24-year-old age group were more likely to own a cellphone than people in any other age group, including the 25- to 34-year-old age group. The only age group with less than 50-percent penetration was the 65+ age group.
In other Forrester findings:
the percentage of prepaid subscribers hit 11 percent in 2004, having doubled their numbers over a two-year period.
customer satisfaction with cellular service declined over three years to about 50 percent in such categories as customer service and call dependability
built-in cameras aren't important to the vast majority of people buying cellphones, but data capabilities are becoming increasingly important. Fewer than 10 percent of subscribers said a camera is important in their purchase decision, but 20 percent of consumers say data capabilities are important in their purchase decision.
In a separate survey conducted for RBRC, NOP World found that the average cellphone user possesses 2.6 or more cellphones, while more than 34 percent have a total of three or more cellphones.
The RBRC survey also found that more than 40 percent of Americans replace their cellphone about every two years and roughly 20 percent replace their cell phones every year.
RBRC is a nonprofit industry-funded organization that promotes rechargeable-battery recycling and administers the Call2Recycle program, which recycles or refurbishes used cellphones and donates a portion of proceeds to national charities, including the Boys & Girls Clubs of America.
Although Forrester found that most people don't consider camera capabilities important in their buying decision, the percentage of phones sold with cameras is rising dramatically, Strategy Analytics said. In 2004, suppliers shipped 257 million camera phones worldwide, up 200 percent over the previous year, the company determined. Camera phones accounted for 38 percent of total handset shipments in 2004, up from 2003's 16 percent of total unit shipments.
Camera phones outsold digital still cameras worldwide by almost 4:1, Strategy Analytics said. In 2004, digital still camera sales grew 40 percent to 68 million units.
In the United States, camera phones outsold digital still camera for the first time in 2004, Strategy Analytics also said. In 2008, camera phones will outsell cameras by more than 3:1 in the U.S.
With camera phone sales growing so rapidly, analyst Chris Ambrosio contended that "the digital still camera market is running out of steam." Camera vendors, he continued "will find growth harder to achieve in 2006."
Strategy Analytics said it believes camera phones will capture 15 percent of the low-end digital camera market by 2010 and that "attempts to sell households in developed markets a second or third device [camera] will be restricted by the ubiquity of multi-megapixel camera phones."
In other camera phone findings, Strategy Analytics predicted that:
30 percent of camera phones shipped worldwide in 2005 will be multi-megapixel models;
removable memory will be standard on camera phones by the end of 2007, but the industry won't consolidate around any particular wireless connectivity option for transferring camera phone photos to a printer or PC.
For its part, the TIA cited the inclusion of cameras, games and other applications as the primary reason for a continued rise in projected factory-level U.S. handset sales despite an expected slowdown in net-new subscriber growth.
"Going forward, the slowdown in U.S. subscriber growth will cut into the handset market," said TIA's president Matthew Flanigan, "but high levels of replacement sales, spurred by the introduction of new features such as cameras, video recorders, games, etc., will continue to fuel growth."
TIA projects factory-level cellular-handset sales in the United States will grow at a 7 percent compound annual growth rate between 2004-2008, from $10.1 billion to a projected $13.3 billion. In 2004, dollar sales were up 11.9 percent on a unit-sales gain of 11.9 percent to 74.2 million.
The dollar-growth rate exceeded the unit-growth rate in 2004, and will continue to do so through 2008, because new features are raising wholesale prices, TIA indicated. During 2004-2008, unit sales will grow at a compound annual rate of 3.5 percent to 85.3 million units, compared to dollar growth of 7 percent.
Average wholesale prices rose slightly in 2004 to $137, following a 2003 decline, and will edge up to an average $156 in 2008, TIA said.
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