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To: DaveMG who wrote (1535)	2/25/1999 12:28:00 PM
From: tero kuittinen	Read Replies (1) \| Respond to of 34857

What we'll see next year is the first batch of GSM/TDMA phones. That's a given. This will transform several marketplaces, including USA. One headache for CDMA in USA is that it is being left out of the convergence as long as the standard war drags on. Meanwhile, GSM is fusing with both TDMA and iDEN. And the GSM 900, 1800 and 1900 formats are merging - first handsets available this spring. This means hadnsets operating in practically all major markets except Japan and Korea. And I mean handsets below 300 dollars. We'll also see how handsets transform into internet terminals - the growth of data traffic some Nordic operators are seeing is 1'000% annually. The reason to focus on handsets is this: we have some genuine technological break-throughs this year. Both in standard-convergence and on the internet front. Manufacturers that can't offer stuff like advanced displays, WAP and Bluetooth are going to be stuck in the low-end market. Nobody is going to buy expensive phones without advanced technology next Christmas. The pace with which people are replacing their handsets keeps speeding up - we're talking about 50% of the phone sales next year being replacement sales. This means 50% annual, overall volume growth in the handset sector. What's so hot about network business? It's not growing anywhere near that rate - more like 20%. The only big growth area is the handsets... and the new technology will keep the price erosion in check. But only for those companies that can deliver WAP, Bluetooth, and big software improvements at low price. And if 5-15% of people are now interested in internet phones you need a standard covering 100 million subs to make the volume strategy pay off. Tero