e the manufacturers of cellular handsets such as Ericsson and Motorola are forced to produce more products, and new products for less money. As an example the Motorola StarTac sold for $250 6 months ago, now that same product sells for $70, that is a 72% reduction in price over 6 months. In a Market that has a growth rate of 15% annually it is difficult for a manufacturer to produce 15% more product for 72% less profit on a per unit basis. As cellular companies offer the cellular handsets for free it is difficult to think that they are doing this and losing money which means they have negotiated very inexpensive prices from the manufacturers.Over the next four years the cellular market is expected to sustain a growth rate of about 15% per year. At the same time newer cellular technologies are evolving such as the new 3G technology which is expected to rollout in 2004. This technology will offer a more wide spread access to the internet through a broadband connection over your cellular handset. Much like the turning point in the cellular industry when the digital technology was released this new technology 3G is expected to have the same reaction. Looking at the past from 1982 to 1997 the industry had steady slow growth. From 1997 to 2000 the industry had explosive growth with the addition of Digital and PCS technology. 2000 through 2004 the industry is expected to continue to have growth at a steady similar to what was seen in the early phases of cellular phones. As these companies have fallen off of the growth reported in 1997-2000 investors have been very harsh as stock prices and profits have fallen. It took 15 years to obtain 40 million subscribers and then 5 more years to climb to 80 Million, so in 1/3 the time the industry doubled. It is reasonable to think that the industry is not going to double again to 160 Million subscribers in 2 years or even 5 years for that matter. The telecommunication industry has fallen off...
