PRACTICE ROUND
European demand is already at a good level. The annual demand growth is estimated to be between 30 and 100% annually, depending on the segment. In the Asian market the demand level currently is low, but the growth is expected to be even higher than in Europe. In both Europe and Asia the growth will be fastest during the next couple of years, after which the growth is likely to slow down. In any case, the consensus among analysts is that the growth rates will be positive for several years to come.

The high-end segments in both the consumer and company segments play a major role in the first years. Later on, with market penetration, the low-end segments might well dominate the sales volumes.

Because PDAs are still
High-end segments are willing to pay more for innovative models and as a result they are going to be important especially in monetary terms in the future.

The size of new PDAs is already very reasonable. Nowadays, the typical frontal area of a high-end device is largely covered by the display and further decreases in size will probably not be appreciated as much as previously. The components have also been pushed to very small sizes.

As a result of rapidly growing PDA markets, the economies of scale factor has been decreasing the unit costs along with the increase in the technological know-how resulting from the R&D efforts.

Interest rates remain at high levels. Therefore, interest payments might become a significant burden for highly leveraged companies.

ROUND 4

As estimated in the previous period, the PDA markets in both continents continue to grow rapidly. Due to the vast population in Eastern Asia, the Asian households should grow to be the biggest segment even in global terms at the end of this period. However, the high price sensitivity of the segment will probably lead to low unit margins resulting in high growth at the expense of profit margins. Moreover, the high-end segments seem to be rather saturated and the increase in sales is about to stall to the level of repurchases.

The differences in the Asian segments seem to continue to be larger than the differences in the