Consumer Demand for Entertainment and Data Services Will Drive Smartphone Sales, Predicts CEA.

Entertainment, Navigation Features Give Mass Market a Reason to Trade Up

ARLINGTON, Va. -- Navigation, email and Internet access top the list of features that consumers look for when purchasing new wireless phones, according to a new consumer research study released today by the Consumer Electronics Association (CEA([R])). The study, Wireless Phone Data and Entertainment Services, found that 40 percent of American adults plan to purchase a new wireless handset within the year. Although only 11 percent of adult cell phone owners say they own a smartphone, the number is likely to grow in the near future as consumer awareness of and demand for wireless services including music, video and Internet access steadily increase.

"While smartphones were once mostly for business use, they are becoming mainstream, as new wireless services like navigation and Internet access are included in more handsets," said Steve Koenig, CEA's Senior Manager of Industry Analysis. "These devices will slowly but surely supplant standard handsets."

Consumers may soon have even more wireless services to look forward to, as the Federal Communications Commission (FCC) concludes its auction of the 700 MhZ analog television spectrum in the coming weeks. The FCC hopes the auction will propel advanced features such as mobile Web browsing and video. The winning carriers are also expected to use newly acquired spectrum to improve existing services in the near term.

CEA estimates that in 2007 unit shipments of smartphones accounted for 15 percent of the total handset volume, a three-fold unit share increase in just three years. In 2008, smartphones are expected to reach over $8 billion in factory-to-dealer sales.

Wireless Phone Data and Entertainment Services (February, 2008) was fielded between November and December, 2007. It was designed and formulated by CEA Market Research, the most comprehensive source of sales data, forecasts, consumer research and historical trends for the consumer electronics industry. Please cite any information to the Consumer Electronics Association (CEA([R])). The complete study is available free to CEA member companies. Non-members may purchase the study for $699 at www.ebrain.com.

About CEA:

The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the $161 billion U.S. consumer electronics industry. More than 2,200 companies enjoy the benefits of CEA membership, including legislative advocacy, market research, technical training and education, industry promotion and the fostering of business and strategic relationships. CEA also sponsors and manages the International CES - Where Entertainment, Technology and Business Converge. All profits from CES are reinvested into CEA's industry services. Find CEA online at www.CE.org.

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