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Feature-rich cell phones are all the rage

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''Now, Dasher! now, Dancer! now, iPhone and RIZR!

On, Sidekick! on, Shadow! on, Donder and Blitzen!''

Santa's packing more than your basic flip cell phones this year. More than in any previous holiday season, companies are pitching feature-rich, often high-priced phones.

In a year that saw the launch of the iPhone - originally $599, now $399 - handset manufacturers hope consumers are warming to the idea of spending more on premium phones with cutting-edge features such as touch screens, slide-out keyboards and memory chips to store music and video.



At the same time, prices are falling on components such as LCD screens and memory chips, making multimedia devices possible for people still not comfortable spending $200 or more on a phone.

These holiday phones are called "iPhone killers" not because any single model is expected to outsell the Apple device, but because they compete with the iPhone for customers who want music, Web surfing and videos.

Industry spokesmen say this season's phones were planned before the iPhone launched in June, downplaying competition with the sleek product from Apple that has a touch screen and a single button on its faceplate. But the AT&T-exclusive iPhone launched with such splash - receiving more media attention than has any other consumer product - that it makes an unavoidable yardstick against which other phones are measured.

"Certainly there are more phones this year that do more things, and the king of those phones is, of course, the iPhone," Jupiter Research analyst Michael Gartenberg said. "The other carriers are offering phones that they hope will capture the consumer interest and capture consumer hearts the way the iPhone has."

He said the iPhone has already shaken up the industry's dominant pricing model - free phones. More people are now paying $100 or more for a phone, though not everyone is ready to pay $399, Gartenberg said.

The New York-based analyst said the other carriers are obviously marketing their holiday phones to compete with AT&T's iPhone.

"None of them are going to call out the iPhone by name, but Verizon, with the Voyager, and Sprint, with the HTC Touch, are clearly promoting the touch-screen nature of their phones," Gartenberg said.

T-Mobile's Shadow also targets the iPhone, he said. The Shadow, with its scroll wheel and rounded corners, looks more like the traditional iPod than the iPhone does.

Technical advances and the falling prices of components are a driving force behind the iPhone killers and the iPhone itself, Gartenberg said.

"Eighteen months ago, you couldn't have made the iPhone at any price," he said. "Today, you can get a Shadow for $198 from T-Mobile. Two years ago, that would have been a $400 or $500 phone."

Gartner analyst Michael King said that the holidays are typically big for cell phone sales, with some manufacturers making as much as 40 percent of their annual sales in the final quarter.

The allure of multimedia and smart phones is helping to push prices higher. "The average price is still below $200, but it's coming up quickly," King said.

He said the average price has risen from under $100 a couple of years ago to about $140 today.

Perhaps the most formidable iPhone challenger comes from Nokia. Unlike most of the iPhone killers, Nokia's N95 costs more than the Apple product. At $699, the N95 does a number of things that the iPhone can't match, but it falls short in other areas.

The N95 boasts a 5-megapixel camera that includes autofocus capability, a flash and a lens from prominent German optics manufacturer Carl Zeiss. The phone even shoots DVD-quality video and has electronic image stabilization.

The iPhone has a 2-megapixel, fixed-focus camera that is not capable of shooting video.

Like most of the iPhone killers, the N95 supports wireless headphones through stereo Bluetooth. The iPhone does not.

The N95 has a slot for removable memory cards up to 4 gigabytes each, while the iPhone comes with 8 gigabytes of permanent memory.

The N95, which can work on AT&T or T-Mobile networks, is capable of connecting to WCDMA 2000 high-speed data networks, which the iPhone cannot.

The iPhone has several features that the N95 lacks, however: a larger, touch-sensitive screen and Apple's interface software, Wi-Fi capability and a touch-screen "QWERTY" keyboard.

Verizon has introduced three phones for the holiday season that make most iPhone-killer lists: the Voyager ($299) and Venus ($199) from LG Electronics and the Samsung Juke ($49).

The Voyager boasts a 2.81-inch touch screen that is larger than those found on most phones but smaller than the 3.5-inch iPhone screen.

The Voyager supports removable memory cards up to 8 gigabytes. It flips open to access a QWERTY keyboard and a second screen. The device includes GPS service and has the ability to play V Cast mobile television.

Verizon spokesman Ken Muche said the company has never introduced so many "iconic" phones in a single holiday season.

Muche said the Voyager from LG Electronics is a natural progression from the LG Envy. Verizon planned the Voyager before the release of the iPhone, he said.

"It's something we've looked to do for a long time," Muche said. "It's not a response to any one device."

Ross Rubin, director of industry analysis for the New York-based NPD Group, said the popularity of feature-rich phones dates to the 2006 holiday season, when the Motorola Q and Samsung Blackjack phones were available for about $100. Sales of the two phones with full keyboards helped push smart-phone sales from 4 percent in 2005 to 8 percent in 2006, he said.

Apple said in October that it has sold about 1.4 million iPhones. Those sales have caused a temporary spike in smart-phone sales, Rubin said.

Rubin said this year's crop of smart phones should increase the share of the market held by phones costing more than $100.

Although many phones today are called iPhone killers, a more serious batch of contenders lurks in research and development labs, Rubin said.

"In terms of the user interface and software, we haven't really seen a response yet," he said. "Nokia has shown some prototypes of a thin phone with a big screen. Symbian has some new operating systems. There are going to be some responses to the iPhone."

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