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Cell Phone Makers Choose Between Style and Tech

AMSTERDAM (Reuters) - After years of running in the same direction toward smaller mobile phones with color screens and built-in cameras, the world's handset makers need to find new ways to make their phones sell, analysts said on Friday.

Some go for fashion and design, other opt for style and many Asian vendors continue to rely on their technological edge to maintain or grow their share in the fiercely competitive 684 million units a year handset market. Color and cameras have become standard in most phones sold in developed markets such as North America, Europe, Korea and Japan, so now handset makers are placing new bets on what will sell.

"The next round is about software differentiation. Over the next five years it will be about secure, virus free, protected applications and services," he told Reuters at the 3GSM mobile communications trade show in Cannes last week.

SOME STILL BET ON TECHNOLOGY

Not all mobile phone vendors believe the technology race is over just yet. While Nokia, Sony Electronics and Motorola announced music deals with Microsoft, Sony and Apple, their South Korean rivals Samsung and LG bet on technology improvements by making sharper displays, better cameras and speakers and smaller phones.

Samsung, for one, showed off small models for third generation (3G) wireless data and voice networks and handsets with rotating displays for yet-to-be-launched digital TV.

"Even in the same clamshell, even in a slidephone you can see the difference. The quality of the display, the incredible surround sound. People recognize it and are willing to pay the premium. That's how we try to differentiate," Samsung's global handset marketing chief Chang Soo Choi told Reuters.

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