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It seems European mobile phone owners can't help investing in new devices as market penetration surpasses 100 per cent and continues to grow.

New figures show the number of handsets shipped in Western Europe increased seven percent year-on-year in the second quarter of 2006, indicating the mobile phone market continues to show solid growth, regardless of suggestions that continued development is unsustainable.

Despite speculation that the traditional mobile phone market is nearing saturation point, shipments increased to 41.4m units compared to 38.5m in the same quarter a year earlier.

According to analysts at IDC, many Western European markets have moved past 100 per cent saturation, leaving little room for growth, and many operators are cutting their product portfolios.

However, movement of WCDMA - or 3G - handsets into affordable price brackets, and the widespread availability of fully-featured phones helped drive the market during the quarter.

Growth in converged devices is also coming into line with the general mobile phone market. These are phones and other handhelds which can be synchronised with servers, desktop PCs, or laptop computers and can handle personal information or email.

In recent quarters, these devices have outperformed the traditional mobile phones in terms of growth, but this quarter saw the converged devices edge ahead by a smaller margin. This has been partly attributed to the growth in popularity of "feature" phones.

"The advantages of an open, evolved operating system for manufacturers, operators, and developers with regard to cost, time to market, and rich customisation advantages are undeniable," said IDC's European Mobile Devices and Computing manager Andrew Brown.

"However, from the perspective of most consumers, the advanced capability is still either deemed unnecessary or lies invisible behind considerations such as form factor and multimedia capability," Brown added.

Nokia remains the top handset manufacturer; shipping 14.5m devices during the quarter. This was followed by Motorola, with 7.1m, and by Samsung with 5.1m units. Sony Ericsson is trailing in fourth place, with 4.5m handsets shipped.

"Nokia is undoubtedly making substantial progress with the S60 [platform] in the consumer space. However, the lack of commercial success other licensees have had with the platform is indicative of the dilemma faced by many vendors," said IDC senior research analyst Geoff Blaber.

"With demand for feature phones still strong, the prospect of high initial costs before the advantages of platformisation can be realised is an inhibitor to widespread migration to an evolved operating system (OS) for consumer devices. Technology demands will command the move in the longer term but the migration is proving slower than vendors, operators, and commentators anticipated."

IDC's quarterly data was released a day before new figures for Symbian showed shipments of handsets using its software rose 58 percent during the quarter. The software allows mobile phones to take photos, go online and play music, with manufacturers such as Nokia, Sony Ericsson and Motorola loading the software onto their handsets. According to Symbian, its software was used in 12.3m phones during the quarter.

Copyright © 2006, ENN

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