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Western European Smart Phone Adoption

According to IDC's Western European Quarterly Mobile Phone Market Tracker, the Western European mobile phone market (consisting of traditional mobile phones and converged devices) maintained healthy double digit growth in 3Q05 as shipments increased by 16 percent year on year and 5 percent sequentially to reach 39.5 million units compared to 34 million in the third quarter of 2004.

Despite a number of leading operators warning of a slowdown in subscriber growth as mobile phone penetration reaches saturation, the heavy promotion of 3G services, the introduction of new multimedia handsets as vendors extend their portfolios, further penetration of Series 60 smart phones into the consumer space, and the proliferation of low-end handsets with highly competitive ASPs, all served to accelerate market demand during the quarter. Furthermore, volume shipments of new devices ensured comprehensive early visibility and availability of devices for 4Q to meet the seasonal increase in demand and spending.

A year on from 3G service launches from tier 1 operators such as Vodafone and Orange, IDC notes vendors' growing commitment to WCDMA within handset R&D in response to operator demands for handsets that meet varying segment requirements and with the capability to deliver 3G services with a lower terminal cost to a larger proportion of the existing 2.5G subscriber base. In 3Q05, WCDMA handsets represented 12 percent of the total market compared to 7 percent in 3Q04, in line with IDC's forecast of WCDMA handset shipments in 2005 representing 13 percent of the total market.

IDC points to the traction that Series 60 smart phones such as the Nokia 6630 and 6680 positioned as advanced multimedia solutions have gained in operator 3G portfolios and their proportion of total WCDMA device shipments in 2005 as a key accelerator of converged device growth. In 3Q05, the market continued to exhibit comprehensive growth as converged device shipments increased by 105 percent year on year and 3 percent sequentially to reach 2.8 million units.

Although the enterprise segment also witnessed an upsurge in growth during the quarter buoyed by RIM BlackBerry and HP Mobile Messenger shipments, overall growth remained dominated by the penetration of the Series 60 platform into the consumer space. In 3Q05, converged devices (including smart phones and telephony-enabled PDAs) represented 7 percent of the total mobile phone market in Western Europe, increasing from 4 percent in the corresponding quarter of 2004, predominantly due to the success Nokia has enjoyed in executing its strategy of positioning Series 60 as a highly capable multimedia platform.

In forecasting converged devices' proportion of the total mobile phone market to increase to double figures in 2006, IDC points to technological advances that will drive further penetration of the mass market.

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