PORT WASHINGTON, NEW YORK, August 3, 2000 – According to leading marketing information provider NPD INTELECT Market Tracking, the Internet-ready cellular phone has managed to take off at an astounding rate at retail* in the past year. Forty-eight percent of cell phones purchased at retail during the second quarter of 2000 were Internet-ready cell phones, NPD INTELECT reports. This is a tenfold increase over the same period last year.

* Includes electronic specialty, mass merchant, office superstores, and department stores

Pricing of Web-enabled phones has stabilized, with consumers paying a premium (about one third over conventional cell phones) for these phones that allow data and voice communication. NPD INTELECT reports the average selling price for Internet-ready cell phones in second quarter of 2000 was $164, versus $211 a year ago.

In addition to Web capability, a host of new features are driving sales of Internet-ready cell phones. These include improved display and lighter weight, contributing to a more attractive consumer proposition.

The recent introduction and heavy promotion of wireless Web access by several major service providers appears to have boosted demand for new handsets. AT&T, Verizon, Sprint PCS, Nextel, and Voicestream, among others, offer wireless Web services. While actual use of these services may lag purchases of Web-enabled phones, demand should increase, as content becomes more robust.

"Cellular penetration will continue to increase, to the point where the handsets are becoming commonplace. As content improves, applications will extend beyond basic sport scores, weather reports, and stock quotes. E-commerce, location-based applications, and pipeline improvements promise to keep this trend going," commented Peter Arato, NPD INTELECT account manager for telecom products. "The big challenge will be finding user-friendly ways to enter and access information on an increasingly miniaturized device. Whether that means improved displays, full keyboard, or voice-activated technology remains to be seen. Consumers have already shown an appetite for Internet applications on PCs. The big winners will be the companies that figure out a way to ease access to similar applications on cellular devices," he said.