Cellular Market Turning to High End?

This column was originally published on RealMoney on Oct. 17 at 3:07 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.

Sony Ericsson logged remarkably strong 17% sequential growth in phone units in the third quarter, going from sales of 11.8 million phones in the second quarter to 13.8 million in the third. At the same time, the average sales price (ASP) rose by a robust 12 euros.

This combination of rising volume and sales prices is rare. It may be early evidence that Western consumers are flocking to high-end models with rich features and hefty retail prices. This, in turn, would be very good news for the component industry.

The mobile phone market is often regarded as swinging like a pendulum between periods dominated by new technologies and those ruled by design innovation. Sony Ericsson typically excels during periods when technological innovation is central and sometimes struggles when consumers are swayed mostly by fashions. ...