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To: Fred Levine who wrote (39196)	11/7/2000 4:13:52 PM
From: Fred Levine	Read Replies (1) \| Respond to of 70976

Tuesday November 7, 4:05 pm Eastern Time Mobile phone replacement rate rising - study By Yukari Iwatani CHICAGO, Nov 7 (Reuters) - Mobile phone service subscriber growth may be declining, but the phone replacement rate, or the percentage of phones that are bought by established subscribers, is increasing and driving the mobile phone market, a recent study said. According to Herschel Shosteck Associates, a wireless consulting firm based in Washington, the phone replacement rate will reach 50 percent in 2003, and sales of replacement phones will surpass sales of first phones to new subscribers. The firm said improvements made to mobile phones such as size, weight, style and Internet capability are helping increase the replacement rate among existing mobile subscribers. The replacement market is seen as key for mobile phone makers in the coming years as markets mature and more people choose to upgrade their phones. The study results also confirmed Nokia's (NYSE:NOK - news) view that the replacement market is healthy. In a more optimistic estimate, Nokia Mobile Phones President Matti Alahunta had told Reuters last month that phone replacement rates could be as high as 70 to 80 percent in coming years. Herschel Shosteck said the rise in replacement sales is driving the introduction of new technologies, particularly Internet-enabling technologies. The study predicted that 90 percent of mobile phones sold by 2003 would be Internet-enabled compared with only 10 percent this year. While Internet-enabling technologies open new doors for traditional mobile phone makers, the study warned that the same technology will lead to greater competition, as nontraditional phone makers like consumer electronics firms develop other wireless Internet appliances. ``The marketplace for these future devices will be highly competitive over the next three to five years,'' the study said. ``While manufacturers in the past have been able to build reputations based on smaller and lighter voice phones, the introduction of the Internet-based content services is a wild card.'' Herschel Schosteck Associates said the Big Three mobile phone makers -- Nokia, Motorola Inc. (NYSE:MOT - news) and Ericsson (NasdaqNM:ERICY - news) -- were all making good efforts to reposition themselves in this changing industry, but they must understand the importance of consumer devices in order to succeed. Historically, the wireless industry first targets high-value corporate markets before targeting consumers. The study implied that if mobile phone firms fail to adjust this way of thinking, they would lose out to consumer electronics firms, such as Japan's Sony Corp. and Matsushita Electric Industrial Co. ``Major consumer electronics firms are best positioned to build the next generation of wireless Internet devices,'' Rich Luhr, director of technology strategy for Herschel Shosteck, said in a news release. ``The ability of Sony, for example, to build key technologies into a family of devices will prove important. Sony, with its huge retail distribution, brand name, market share and partnerships, may succeed in a a strategy of designing multiple, compatible devices where others may not,'' Luhr added. fred

To: Fred Levine who wrote (39196)	11/7/2000 4:51:11 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

High chip prices will push out Bluetooth technology until 2002, says analyst Semiconductor Business News (11/07/00, 03:44:22 PM EDT) NEWTON, Mass. -- Despite the product announcements and hype surrounding Bluetooth, the wireless technology will not reach the mass market until 2002, due in part to high chip prices, according to a new report released today from Meridien Research Inc., a market research house based here. The price of a Bluetooth-enabled chip currently sells for around $27, but the product must to fall to the $10 to $15 range in order for it to reach market acceptance among OEMs and consumers, said Meridien analyst Jennifer Schmidt. "Based on our analysis, we don't think the chips will be that cheap anytime soon," Schmidt said. Other analysts believe that a Bluetooth-enabled chip must sell for $5 or less before it becomes a viable solution in the market. Many chip makers and OEMs originally expected that Bluetooth would become a mainstream product by late-2000 or early-2001, but most observers do not see this technology taking off in volumes until 2002 or beyond. While several chip makers and OEMs have announced Bluetooth-enabled products in the market, the technology still suffers from high costs and compatibility issues. One of the problems with the technology is incompatibilty among the various radio-frequency (RF) chips in the market, analysts said. Bluetooth is a technology that links laptops, mobile phones and other portable devices from various manufacturers over a short-haul, wireless network at speeds up to 1-megabit-per-second. One of the advantages of Bluetooth is that the technology does not require a line of sight. In 1998, Bluetooth was originally conceived by Ericsson, IBM, Intel, Nokia, and Toshiba. Several chip makers have announced Bluetooth-enabled chips, such as Atmel, Cambridge, Conexant, Ericsson, Motorola, National, Philips, Qualcomm, SiliconWave, and a slew of others. Many of these chip makers have begun shipping their Bluetooth-enabled baseband controllers or RF chips in the market.