Market maturity may impact the mobile phone market as designers continue to make handsets look and feel unique.
``Demand for specialty plastics will continue to increase [as] vendors look to differentiate'' their products, said John Jackson, an analyst with Yankee Group's wireless and mobile technologies unit.
The U.S. and Canadian market will consist mainly of enhanced phones - accounting for more than 86 percent of the market in 2004 and more than 90 percent in 2005, said Tuong Nguyen, a Gartner Inc. mobile and wireless industry analyst in Lowell, Mass.
``Smart phones have gained traction in 2004, are gaining momentum in North America [and are] expected to be nearly 20 percent of the market by 2008,'' Nguyen said.
Still, mobile phone designs have reached a level of maturity where name-brand manufacturers can outsource product reliably from original or contract design manufacturers, Jackson said.
Thanks to Brazil's tariff laws, firms with significant manufacturing there include Elcoteq Network Corp. and Nokia Oyj, both based in Espoo, Finland, as well as locals like Gradiente EletrÃ´nica SA of Sao Paulo, Jackson said.
Manufacturing strategies vary among the firms. Market leader Nokia is outsourcing more manufacturing and assembly while Sony Ericsson Mobile Communications AB tries to in-source more, Jackson said. Nokia does its own final assembly on about 85 percent of its phones.
Yankee Group in Boston predicts users globally will buy 653 million mobile handsets in 2005, up from about 630 million last year. Its domestic forecast: 126 million units, vs. 119 million in 2004.
High-growth countries currently are China, India, Malaysia and Brazil. But marketers also are seeking more prepaid subscribers, Jackson said, and ``that is where the U.S. has to grow.''
Nokia had a global mobile phone market share of 30.9 percent for the quarter ended Sept. 30, down from 34.2 percent a year earlier, Gartner said. Among the other majors: Samsung held 13.8 percent, surpassing for the first time Motorola Inc., at 13.4 percent; Siemens AG, LG Electronics and Sony Ericsson had 7.6, 6.7, and 6.4 percent, respectively.