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Study: Wireless graphics market to boom

The market for wallpaper and other visual content leapt 360 percent this year, up from $47 million in 2003, IDC estimates.

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The U.S. market for graphics for cell phones will grow from approximately $150 million this year to $1.1 billion by 2008, according to a new study by IDC.

The market research company also predicts that total annual graphic downloads will rise to 616 million in 2008, up from a mere 80 million this year.

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The growth is notable considering that the U.S. wireless market is expected to experience slowing subscriber growth over the next five years, decreasing from 10.8 percent in 2004 to 3.3 percent in 2008.

The market for graphic content, which includes wallpaper, caller ID images and screensavers, among other types of images, leapt 360 percent this year, up from $47 million in 2003, the IDC study estimates.

According to the market researcher, graphic content has emerged from the shadow of its more high-profile application cousins--ring tones and games--to become a unique market with its own characteristics and dynamics.

In terms of market penetration, IDC expects nearly a quarter of all subscribers to be using graphic content by 2008, when penetration will surpass the 52 million mark. IDC also anticipates that the number of downloads per user will rise rapidly. In 2004, the company said, each user on average downloaded one piece of graphic content every three months; in 2008, each user will download one piece of content nearly every month.

"Graphical content such as wallpaper is phenomenally popular, especially among youths and young adults," IDC research analyst Lewis Ward said in a statement. Youths and young adults are five times more likely to pay for and download graphics than are their adult counterparts, he said.

"Furthermore," Ward added, "bundling graphical content with other similarly themed content should become prevalent over the next few years, as will tying such content to movie and album releases, all of which should propel revenue through the content ecosystem."

Helping the graphics market to grow will be a fundamental shift that the wireless industry is currently undergoing: from a voice-centric industry to one that is driven by data.

Most wireless service providers in the United States, including AT&T Wireless, Cingular Wireless, Sprint, T-Mobile and Verizon Wireless, are already bundling limited graphical content as part of different plans for a price.

However, there are several hitches related to graphic content, including relatively low penetration of advanced handsets that support rich animation and full-motion video. Another problem is the absence of digital rights management standards.