Leader: Mobile's changing landscape

If you're a company that makes cars, would you rather be a mass market producer or a seller of more expensive, luxury vehicles? Would you rather be a Ford or a Rolls-Royce?

There is, of course, no simple answer. This publication's key area of expertise isn't the automotive sector but certain business principles apply across sectors.

So to mobile phones. Yesterday saw an announcement that there would be 300 million mobile phone users in China by the end of this year, a growth market that means the likes of Ericsson, Motorola, Nokia and Siemens have major facilities there.

Today, Gartner optimistically held out hope for a European market that may well be far from saturated, so long as 3G handset sales take off, capturing the public's imagination with new services.

Meanwhile Orange, in cahoots with Microsoft but also pushing plush models from most other major phone makers, spoke again of a refined high-end of 'signature phones', such as the latest SPV, quite possibly the world's smallest smart phone.

And Nokia, Gartner revealed, has been doing what people have been saying for a while: concentrating on higher end models, the game deck N-Gage, enterprise connectivity, emerging markets - in fact, lots of areas apart from mid-range handsets, typically clam-shell with an integrated camera, which consumers have been snapping up. And all this has meant a falling market share. It's down worldwide to 28.9 per cent in Q1 2004 from 34.6 per cent in Q1 2003.

So back to the original question. What kind of market are we looking to here? Would a CEO rather be a Henry Ford or a Mr Rolls or Royce right now?

Orange and Nokia recognise the margin to be had in serving professional end users with sexy phones, typically integrating with business software. However, manufacturers such as LG Electronics and Samsung have been feeding on a mass market desire for simpler but still well-made handsets, used mainly for voice.

The answer is that most companies - whether operator or vendor - would like to be a Toyota, with its mass car and trucks business as well as a luxury Lexus brand.

That's a difficult balance - and the reason why we're seeing some changes in the mobile landscape right now.