Nanotechnology enabled mobile handset components, which can improve the performance of wireless handsets, will develop into a $15bn market by 2012, market research company Pioneer Consulting predicts.

As mobile handsets continue to shrink, the technology used to make the individual components is coming under increased pressure to be smaller, more power-efficient and more cost-effective.

Furthermore, the demand for better performing displays, batteries, processors, RF, antennas and memories is greater than it has ever been.

These pressures have led researchers to look at nanotechnology to help address these needs and the problems they create.

Pioneer Consulting's latest report forecasts that the market for nanotech-enabled components in wireless handsets will grow at a rate of 70 per cent between 2007 and 2012, reaching the forecasted $15bn by the end of 2012.

Currently the only components using nanotechnology are RF and display modules, but by the end of 2012, the company predicts that the largest market share will be for batteries followed by displays, processors and memory.

"Although the short-term investments required for introducing nanotechnology into handset components are huge, the stakeholders in the handset industry will need to focus on the long-term advantages that nanotechnology has to offer," said Aditya Kaul, senior analyst at Pioneer Consulting's emerging wireless practice.

"In the long-run, the incremental process and material improvements coupled with the large economies of scale will lead to lower bill of material costs, allowing for a subsequent return on investment."

Some of the nano-processes and materials included in the report are carbon nanotubes, buckyballs and fullerenes, spintronics and quantum dots.

Other product-specific nano-materials include, hydrocarbon fuel membranes in batteries, electron based LED displays and bulk acoustic oscillators in the speakers.