By eweek  |  Posted 2001-06-04

Just when we all thought Nokia was firmly entrenched as leader of the cell phone market, demand for data services from mobile handsets emerges and shakes up the picture.

Over the next few years, its likely that a slew of new companies whose names we dont recognize today will usurp Nokias seat of power. Many of those companies will likely come from Asia-Pacific.

Most figures show that today Nokia safely holds around 30 percent market share for cell phones. The company is noted for its keen sense of form and usability, as well as its prowess in frequently churning out new models.

But once handsets become increasingly software-driven, as users ask the devices to perform tasks besides voice, phone makers will have more leeway to be creative. And that opens the door for nimble new players to steal some market share from powerful Nokia. Those players will likely come from Asian companies that have already begun to experiment with data-capable phones, especially in Japan with NTT DoCoMos i-mode service. Such phone makers already sell colorful, minuscule phones with color screens and digital cameras attached.

Those companies could try to approach markets around the globe directly, but many will want to pair up with other handset makers that already have footholds in regions outside of Asia-Pacific. The partnerships between East and West have already begun. The one creating the most buzz is being formed by Ericsson and Sony.

Other pairings may follow, as Asian companies hope to gain a foothold in Europe and European makers try to learn from the Asian experience.

Some say that Nokia could get left behind in all that deal-making because, as a market leader, its not likely to want such a partnership, says Eric Kintz, associate partner at Roland Berger Strategy Consultants. In that case, another East-West duo could elbow out todays market leader.

With each new data-enabled network that is turned on around the globe well see new handset makers pop up. But as in any new technology space, consolidation will probably follow. The market leaders that emerge will be companies that either dont exist today or are global unknowns.

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