[IDC believes adoption of 3G in Asia/Pacific, Europe, and the US will take several more years to gain momentum with expected 3G mobile phone shipments reaching 25% of the market in 2007.]

Framingham, MA -- In 2004, the worldwide mobile phone market will grow 20% to 648 million units. The demand for color displays and camera phones from both mature markets and developing markets remained strong through the first three quarters of the year and is expected to continue through the fourth quarter. However, 2005 is expected to see a slow down in market growth due to the lack of additional catalysts.

When carriers began offering 2.5G mobile phones several years ago with color displays and cameras, existing wireless subscribers rushed to upgrade their basic, existing handsets and significant numbers of consumers decided to buy a mobile phone for the first time. After several years of new purchases and replacements and upgrades driven by color and cameras, a new catalyst must emerge if the market is to continue to expand at its current rate.

"Without a doubt, many pieces of the 3G puzzle are falling into place, from infrastructure deployment to semiconductor development to mobile phone availability. In particular, 3G mobile phones continue to improve, offering smaller form factors, longer talk time, and lower price points than ever before," said Alex Slawsby, senior analyst, Mobile devices. "Continued delays in the evolution of compelling 3G services and content, however, remain. Although 3G mobile phone volume will grow, a relatively prolonged transition period from 2.5G to 3G will leave the mobile phone market with a weaker set of demand catalysts in 2005."

IDC believes that 3G adoption among the broad consumer subscriber base in Asia/Pacific, Europe, and United States will take another few years before it begins to gather momentum. In 2006, 3G mobile phone shipments should expand to represent 18% of the market and finally, in 2007, represent approximately 25% of market shipments.

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