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'Fun' enlarges camera phone sales

Cell phones with cameras will outsell smart phones by a four to one margin this year, because entertainment is more fun than the promise of increased productivity, one analyst says.

In a sign that entertainment is a better wireless salesperson than ads that tout increased productivity, an analyst at In-Stat/MDR said Tuesday that cell phones with cameras will outsell smart phones by a four to one margin this year.

The projections are a glimpse into the wireless industry's strategy of selling "specialty phones" targeted at specific markets. Smart phones are generally marketed as a work productivity tool because they combine two corporate electronic staples: a cell phone and a personal digital assistant.

"A camera in a cell phone is just fun," said Neil Strother, a senior analyst with In-Stat/MDR. "It's a lot easier to sell than 'Gee, do you want to be more organized?'"

Camera phones are also much cheaper. In the United States, camera phones often sell for under $100; a smart phone generally costs about $400. Also, according to Strother, smart phones might "be a miniature laptop in your hand," but developers have yet to come up with a breakaway software program that executives would buy, which would likely increase smart phone sales overall, the analyst said.

This year, cameras will be inside about 43.3 million cell phones, or roughly one in 10 sold, said Strother. Meanwhile, sales of cell phones considered "smart" because they have advanced operating systems from Microsoft, Palm or Symbian will total 11.6 million. Symbian is a privately held company owned by the world's major handset makers.

Fun will win out every year at least through 2008, but the gap will close significantly, Strother believes. By that time, 366 million of the 680 million cell phones sold will have cameras inside.