More than 55 million people will soon have a mobile which can do more than just make a call.
Camera phones are set to top Christmas wish-lists
Wireless industry analysts ARC Group say users will be seduced by new camera phone features and better multimedia messaging packages by Christmas.
It will mostly be existing rather than new users who drive the demand for better, upgraded handsets.
This almost doubles the current number of those with phones able to take and send pictures.
Innovative design features like rotating camera heads and swivelling screens have attracted many across the globe, said the report's author David McQueen.
"Along with the advent of multimedia messaging, colour of displays and polyphonic ring tones, we'll see many consumers upgrading their phones this Christmas," he said.
The number is set to continue to explode too, with predictions of 130 million handsets with all the bells and whistles which characterise 21st century mobiles being snapped up by 2005.
As 3G technology influences mobile habits, that number should nearly double again by 2008.
Style over experience?
Japan still leads the video phone market
Asia stills lead the pack in camera phone technology and take-up. But Europe should improve its market share, with more providers improving picture messaging packages and services.
The Japanese, unsurprisingly, head up the video phone market and it is expected that in the next six months, one in four camera phones sold in Japan will be able to record video.
There are still some big hurdles for handset manufacturers to jump, Mr McQueen warned, including the challenges of finding the balance between device costs, performance and style.
Branding and a stronger focus on what users want and can actually do with their phones will be increasingly important for manufacturers.
This will not only be the case for the market leaders like Nokia and Motorola, but also for newer handset developers hoping to attract the snap-happy mobile generation.