Global sales of mobile phones are expected to increase 8 per cent to 480 million units a year by 2005, due to rising demand for new colour-screen models, according to mobile phone screen maker Seiko Epson.

After a 4 per cent year-on-year decline in 2001, global handset sales grew 3 per cent in 2002 amid a slow recovery in the global tech industry and were forecast to rise 6 per cent in 2003, said Mr Lear Wang, general manager of the components business group at Seiko Epson's Taiwan branch.

Seiko Epson and Sharp are two of the world's top suppliers of colour screens for mobile phones.

"Although the penetration rate of colour-screen cellphones is already very high in Japan and Korea, there's still large growth potential in other countries in Asia, Europe and the United States," Mr Wang told a technology seminar.

Mr Wang said his optimism was also based on rising demand for handsets with built-in cameras, featuring picture messaging.

Japan's three mobile phone operators - NTT DoCoMo, KDDI and J-Phone - have introduced several camera-phone models to meet increased demand.

In 2003, shipments of mobile phones with embedded cameras were estimated to rise to 75 million units, triple 2002's level, and increase to more than 100 million units next year, Mr Wang said. More than half of the world's mobile phones would be colour-screen models in 2004 and the ratio would climb to 62 per cent in 2005, he said.

Handset contract manufacturers from Taiwan and China would churn out around half of the world's cellphones in 2004 as multinational players such as Nokia and Motorola shift some production to the fast-growing China market.

Benefiting from rising demand, Taiwan's top mobile phone maker BenQ Corp, which produces cellular phones for Motorola, has said it expected 2003 sales to jump at least 20 per cent from last year.