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54 Million Private Branded Handsets Will Be Shipped in 2006

Some 54 million private operator-branded handsets—cellular phones manufactured for a mobile operator and bearing its logo only—will be shipped worldwide by the end of 2006, representing more than 5% of total handset shipments. Their sale to subscribers will generate $8.7 billion for the operators, according to a new study from ABI Research.

More than two-thirds of these handsets are enhanced feature phones, the majority of which are provided by mobile operators such as NTT DoCoMo and KDDI in Japan. However, in Europe, North America, and many parts of Asia, the majority of operator-branded handsets are smartphones.

Research analyst Shailendra Pandey says, "Private branded handsets allow mobile operators to control device form factor, feel and features, in order to align the product more closely with their services and target customer segments. Most established handset vendors do not manufacture private branded handsets for operators. However, growing competitive and market pressures are forcing them to be more flexible in their approach, supporting operators' requirements for operating system and user interface customization.

"The private operator-branded handsets marketplace is currently dominated by vendors such as HTC, Sharp, Panasonic, NEC and Sanyo. HTC manufactures private branded handsets for most of the leading mobile operators, including Cingular, Verizon Wireless, Sprint, T-Mobile, Vodafone, O2 and Orange. Sharp, Panasonic, NEC and Sanyo mainly provide private branded handsets to NTT DoCoMo and KDDI.

Vodafone's recent agreement with Huawei to supply private branded 3G handsets for 21 of its mobile markets around the world will further accelerate the growth of operator-branded handsets shipments from 2007 onwards. The growing demand for operator-branded handsets has provided emerging handset manufacturers such as Huawei with a very quick route to greater market share.

"ABI Research expects the market for private operator-branded handsets to grow to over 127 million handset shipments by 2011," says Pandey. "This will lead to a healthy level of innovation from new and existing manufacturers that will improve consumers' experience and ultimately benefit the mobile operators' business cases."

Source: ABI Research

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