The camera phone took its place in the sun in 2004 and will continue to shine during the coming year. At the end of 2004, 20 percent of U.S. Internet users owned a mobile phone with an embedded digital camera, according to an InfoTrends/CAP Ventures study. Cell phones are now available with built-in cameras reaching upward of five megapixels, making the mobile imaging experience much more robust than it was only last year, even if the ability to deliver images across various media remains a challenge.

Other mobile phone innovations, including higher-resolution display technologies and more energy efficiency, continue to propel the market forward. And a range of new features such as video playback, MP3 and GPS capabilities are sending consumers out to upgrade their existing phones to keep up with technology. New purchases and upgrades fuel spending on new batteries, chargers, carrying cases, and snap-on covers and other fashion accessories.

In January 2005, approximately 70 percent of U.S. households will own a wireless phone after growth of close to 15 percent in 2004. For 2005, CEA projects wireless phone sales will surge to an industry high of $11.3 billion, from $10.5 billion the prior year.

Growing interest in hands-free communication has raised demand for headsets, from stealth earbud models to more cumbersome but efficient boom headsets. Bluetooth-enabled head-sets and car speaker kits are gaining favor because they are free of wires like the cell phone. Unlike wired headsets, however, they require a cell phone with a built-in Bluetooth module or a Bluetooth attachment.