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Thursday, 24 October, 2002, 07:09 GMT 08:09 UK
Mobile phones get the picture
picture messaging
Will it be a jolly season for the phone firms?

Mobile phone companies will be watching their Christmas trading figures more closely than usual this year.


This is a step change in the way people can use their phones

Andrew Jones, Aerodeon
The festive season is expected to provide the first test of consumer demand for so-called multimedia messaging (MMS), currently seen as the industry's best hope of squeezing more money out of its subscribers.

Mobile phone operators and manufacturers, burdened with debt and facing saturated consumer markets, will be hoping that Christmas shoppers enthusiastically embrace the new technology.

Troubled Swedish mobile equipment maker Ericsson, which on Friday unveiled a thumping $417m (270m) loss for the July to September period, will perhaps be watching more closely than most.

Even industry giant Nokia, which last year saw its handset sales decline for the first time since 1990, would warmly welcome signs that consumers' love affair with their mobiles was back on.

Picture perfect

MMS handsets allow users to send messages containing images and photographs taken using built-in cameras.

Two of Britain's mobile network operators - T-Mobile and Orange - have already set up picture messaging services.

Vodafone has just unveiled its Vodafone Live service, and MMO2 is expected to follow suit by the end of the year.

Cheerleaders for MMS say the new service will surpass the popularity of text messaging, while also appealing strongly to advertisers and other commercial users.

"This is a step change in the way people can use their phones," Andrew Jones, managing director of mobile phone marketing agency Aerodeon, told BBC News Online.

For mobile phone companies, MMS holds out the promise of a return to double-digit revenue growth through increased handset sales and higher spending on messages by customers.

Stumbling block

However, one factor likely to limit the take-up of MMS is that, for the moment, users will only be able to send pictures to subscribers on the same network.

Network operators are working on ways to make their systems compatible, but the big breakthrough is unlikely to come until next year.

Text messaging faced similar restrictions when it was first launched, and only really took off when full 'interoperability' was achieved.

A second potential drawback is the high cost of MMS handsets, with some costing more than 250 in the UK.

However, experts believe that sales of picture messaging handsets during the all-important Christmas period will still provide a reliable gauge of their popularity with consumers.

"Style leaders will be most interested this year, but by next Christmas, picture messaging handsets will account for a significant proportion of the market," said Mr Jones.

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