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Bright light for wireless?

Cell phone shipments won't dip this year, as many expected, according to analyst firm IDC. And that's only part of the good news.

Analyst firm IDC on Monday issued an upbeat report about 2002 cell phone shipments, the latest in a recent spate of positive news for the otherwise battered U.S. cell phone industry.

It had been widely believed that cell phone shipments would decrease this year over last year's shipments as the wireless sector cut costs and otherwise tried to deal with its first-ever global handset sales slump in 2001. But IDC wireless analyst Kevin Burden believes manufacturers will ship 391 million phones in 2002, a nearly 2 percent jump over the number of phones shipped in 2001.

Burden said to expect "modest" growth in 2002 because of first-time buyers in new cell phone markets, such as India and China. He also expects cell phone owners in established markets, such as the United States, to continue upgrading to more sophisticated cell phones now flooding the market.

"Hopefully, the industry has 'troughed' and is turned itself back up," Burden said.

The IDC report follows good news in the last week from wireless companies such as Nokia, whose cautious

Qualcomm on Friday said it expects to ship more cell phone chips this quarter and next, thanks to rising demand for newer phones that let consumers surf the Web and swap pictures. There was even news from the networking gear makers, the hardest-hit industry, with Lucent Technologies saying on Monday that it expects sales in its current fiscal year to stabilize.

Also on Monday, Salomon Smith Barney analyst T.C. Robillard wrote to clients that he's still expecting global handset sales to reach 430 million in 2003, which would be slightly ahead of some other analysts' estimates.

He even did something rare for a wireless analyst in 2002 and upgraded his outlook for a pair of companies: service provider AT&T Wireless and Nokia, based in part on Nokia's recent refusal to lower its annual sales forecast.

But Robillard downgraded one key wireless player--chipmaker Qualcomm. He doubts that China and India, two markets in which Qualcomm has begun selling gear, are the clear-cut winners that Qualcomm believes.