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The number of mobile phones worldwide crossed a milestone in 2007 and reached 1.15 billion units, according to research firm GartnerInc. That is a 16 percent increase from 2006 sales of 990.9 million. This means approximately one out of every six person on earth owns one of these communication devices. A big reason for the continued growth is the emerging markets of China and India as many people in those countries bought their first phone, said Carolina Milanesi, Research Director for Mobile Devices at Gartner. Another reason is increased convergence of technology towards the mobile phone—TV tuners, global positioning satellite (GPS) functions, touch screens and high-resolution cameras—which cater to the more mature markets such as Japan and Western Europe, added Milanesi. Nokia remains the behemoth of the mobile phone industry, increasing their global market share to nearly 40 percent, leaving its main rivals—Samsung, Motorola, Sony Ericsson and LG—trailing in its wake. “Phone manufacturers need to continuously adapt their portfolios to respond to operators’ demands for open platforms, lower pricing and more personalization,” recommended Milanesi. “They should also try to meet consumers’ desires for fashionable, easy-to-use phones.” In this aspect, Nokia seems to have hit all the right buttons, so to say, and clearly demonstrates how success in the handset business, as in the fashion industry, is increasingly determined by trends and fads. History has certainly proven that companies that were late to sell phones with key features and modern, trendy designs suffered huge losses and were either forced to fold or accede control to their competitors. Remember Siemens, Alcatel or Ericsson before it became Sony Ericsson? When Taiwan-based BenQ took on Siemens’ mobile phone business in 2005, its Chief Executive KY Lee was famously quoted as saying ““What we will bring to this is a proven record of delivering innovative products quickly to the market.” In more recent times, Motorola—widely reported to be in the doldrums—had earlier success with its Razr phone model but apparently failed to follow that up with another path breaking new product, thus allowing its more innovative rivals to overtake them and capture greater market share. “Phone manufacturers are only as hot as their last major hit,” said Carmi Levy, Senior Research Analyst at the Info-Tech Research Group, in 2007. What about the demise of Japanese mobile phone companies in China? Reports have suggested that there are lessons to be learnt there about meeting consumer demands while not over-anticipating their needs. But we shall leave that discussion for another time. For now, mobile phone companies should remember to continue on the path of innovation or face losing out. “Innovate or perish” - that should be on every wall of their plants and offices. | 
