Cell Phone Market Growth Slowing

The global market for cell phones grew by 30% last year, but according to a Gartner survey, worldwide market growth will slow to 7% in 2005. In Japan, where sophisticated mobile devices are nearly universal, sales of new models actually declined in 2004.

Not only is the cell phone market plateauing in many regions, but people are not upgrading their phones as rapidly as they once did. Technical improvements are not as dramatic, and users seem satisfied with the phones they have. Third-generation (3G) phones do not appear to be catching on among consumers, in part because of their greater bulk.

Instead of enticing customers to upgrade, carriers and phone manufacturers may attempt to expand the lower end of the market by offering inexpensive phones and calling plans.

Source: CNN.com