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Merrill Lynch boosted their forecasts for handset sales in 2006 and 2007. The increases are a bit out of synch with recent disappointing reports from the handset channel. Cellular-news.com reports:

Merrill Lynch has upgraded their forecasts for handset sales next year to 1,067 million, in a research note from their analysts. Their 2006 handset estimate has also increased from 918 million to 970 million. In their view, 2006 could be the peak year for global and emerging market net adds at 440 million and 387 million.

They expect the annual growth rate of handset unit shipments to slow from 20-30% seen in 2003-06 to 10% or less in 2007-10, mainly driven by a slowdown in emerging markets subscriber growth from 28% YoY in 2006 to 18% YoY in 2007. However replacement handsets in emerging markets will grow at 66% in 2007 and provide the impetus for industry unit growth.

WCDMA handset market should accelerate, driven by HSDPA adoption, to 67% YoY to 168 million, up from 10% to 15% of the market in 2007.

The Cellular-news article has some decent charts on handset sales growth which are included below.

handsetsales

asian handset sales

Source: Merrill Lynch Ups Handset Sales Forecasts Believing 2006 Could Be Peak Year for Global Sales