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Dual-mode phones go ballistic

But who's in the lead?

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Dual-mode phones that also connect via Wi-Fi are starting to take off - but analysts can't agree who is in the lead of the emerging market.

From a nearly standing start, the dual-mode devices have overtaken single-mode Wi-Fi phones from the likes of Cisco and Spetralink, used in the enterprise or for Skype, according to analyst firm Infonetics. Dual-mode devices, such as Nokia's E61, and now make up 71 percent of the $535 million Wi-Fi phone market.

Dual mode devices will grow at 198 percent per year until 2010, said analyst Richard Webb of Infonetics: "Users are demanding single number/single device services, and operators like T-Mobile announced converged services based on Unlicensed Mobile Access (UMA) in 2006," he said Richard Webb. "UMA is a good example of early fixed-mobile convergence (FMC), prior to the eventual shift to IMS in the long-term."

Infonetics says Samsung is in the lead in dual-mode handsets, but other analysts find this strange, given Nokia's strong presence in the market. "Nokia announced in its results last week that the E-series has sold almost two million units since its introduction in the second quarter 2006," said Dean Bubley of Disruptive Analysis. With Nokia's business division making $1 billion last year, Bubley estimates the company could have made $500 million from the dual-mode phones including the E-series and N80 Communicator. With HTC "in the same ballpark with its various PDA-style devices", Bubley suggests that Infonetics' estimate of $379 million for the overall market may be a bit low.

Samsung's P200 and T709 have done well in early UMA shipments, but that probably gives them less than 100,000 units, says Bubley.

Overall things look good for dual-mode phones then, but let's keep it in perspective. Worldwide mobile phone sales hit $115.5 billion in 2006, growing at 26 percent, and half of that is still in 2G/2.5G handsets. The $379 million that Infonetics gives dual mode phones, or the larger figure that Bubley implies, will still be a small proportion of the phone business for the next couple of years.



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