v     Global subscriber base has passed the 2 bln mark, moving towards 3 bln; new phone demand will be followed by replacement demand. v     Growth of multimedia services pushing replacement demand in mature markets; value-line models stimulating growth in emerging markets market polarizing to two opposite ends of the spectrum. v     Handset makers?two-pronged strategy: making profits in emerging markets, while at the same time entering high-risk areas such as 3G. v     Major brands?competition is continuing the trend of large players becoming even larger; in 3G era four conglomerates are being formed; regional brands?room for growth limited. v     In adapting to global market polarization, major brands are adjusting R&D and production, thereby influencing the industry value-chain.