INTRODUCTION

Today information technology has become an essential need for organizations to survive in a highly competitive environment. Firms use information system to support their business processes and Decision making processes that leads to a competitive advantage for them. Organization is a set of people that work together to achieve a common goal with limited resources. Firms develop its long run strategies to meet those goals after analyzing its internal strengths and weaknesses and external opportunities and threats. Today information technology has change the way of decision making processes and decisions itself as firms can get real time data and communicate all over the world easily. In conclusion, information system affects the long run strategies of firms that lead to achieve their organizational goal in an efficient way. So firms information system strategy should be deployed according to its long run strategies that lead to organizational perform. Firms usually formulate their information system strategy to acquire, deploy and support its information system that ultimately aim to fulfill their business needs through partnership collaboration and exploiting new opportunities available in market to compete in a global perspective (Porter & Miller, 1985). Scope of information system strategy is positively correlated with the change in size and line of business e.g. large firms with large information needs a wider information system. This paper tries to define the firms information system strategies and the frameworks that illustrate that how to plan these information system strategies.

IT OPPORTUNITIES
New technologies came and change the way of life continuously. Information technology provides opportunities for the managers that change the way of information system. It is also found that first mover got the advantage as the time period of these new technologies are small. Many changing trends are evidenced in Information System field during last 50 years. In 1950s IS was just restricted to Data Processing systems in record keeping that converted to management reporting systems to support decision making in 1970s. 1980s era expanded the role of IS to strategic and end user support systems in designing executive information systems, knowledge based proficient recommendations to customers and strategic Information to gain competitive advantage (OBrien & Marakas, 2004:11). So new
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changing trends and opportunities to become first mover from IS effect the IS strategies of a firm. Before exploiting IT opportunities managers should know their requires need that whether they want increase in productivity, profits or consumer surplus because research reveals that IT increases productivity and consumer surplus but it doesnt mean that it will lead to very high profits (Hitt & Brynjolfsson, 1995).

COMPETITIVE STRATEGIES:
Decisions generate action that produces results. Organizational results are the consequences of the decisions made by its leaders. The framework that guides and focuses these decisions is strategy. The framework that guides competitive positioning decisions is called competitive strategy. The purpose of its competitive strategy is to build a sustainable competitive advantage over the organizations rivals. It defines the fundamental decisions that guide the organizations marketing, financial management and operating strategies. Long term action plan that is devised to help a company gain a competitive advantage over its rival. This type of strategy is often used in advertising campaigns by somehow discrediting the competition's product or service. Competitive strategies are essential to companies competing in markets that are heavily saturated with alternatives for consumers. Gaining competitive advantage is critical for organizations. Baltzan and Phillips (2010) define competitive advantage as a product or service that an organizations customers value more highly than similar offerings from its competitors (in other words, you have something useful (i.e. products, services, capabilities) that your competitors do not have). Competitive advantages are typically temporary as competitors often seek ways to duplicate the competitive advantage. In order to stay ahead of competition, organisations have to continually develop new competitive advantages. An organization can analyze, identify, and develop competitive advantages using tools such as Porters Five Forces, three generic strategies, and value chains. Michael Porters Five Forces Model is a useful tool to assist in assessing the competition in an industry and determining the relative attractiveness of that industry. Porter states that in order to do an industry analysis a firm must analyses five competitive forces.

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Rivalry of competitors within its industry Threat of new entrants into an industry and its markets Threat posed by substitute products which might capture market share Bargaining power of customers Bargaining power of suppliers. Basic strategic approaches are possible as below

AGGRESSIVE STRATEGY:
This strategy often requires significant capital investment and includes the following options. Changing or altering the competitive structure or environment in your industry (forward or backward integration, acquiring competitors, etc.). Anticipating industry competitive structural change and positioning your organization to exploit this change before others recognize it (developing substitute products, changing the mode of sale or distribution, etc.). Diversifying into more attractive markets.

PROTECTIVE STRATEGY:
Accepting the industry competitive forces as a given and positioning your organization to best defends against them. This could include harvesting and selling the business before competitive conditions cause its value to drop.

FREEDOM FIGHTER OR FUNCTION STRATEGY:

Minimizing or neutralizing barriers by reducing the size of the playing field and taking an offensive or defensive position in a smaller, more attractive market segment. Every business has a competitive strategy. However many strategies are implicit, having evolved over time, rather than explicitly formulated from thinking and planning process. Implicit strategies lack focus. Produce inconsistent decisions, and unknowingly become obsolete. Without a well-defined strategy, organizations will be
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driven by current operational issues rather than by a planned future vision. This model provides a process to make your competitive strategy explicit so it can be examined for focus, consistency, and comprehensiveness. Once the competitive set has been analyzed, you will be in a position to develop a powerful competitive strategy what competitive advantage can you develop which is sustainable in the long term? A low price strategy, for example, may deliver a significant short term sales gain but is unlikely to be sustainable for the long term unless you are a lowest cost producer. As noted above, the main strategic choices are to be cheaper, better or different. When looking at competitive strategy, there are three different strategic routes (known as the Porter's Generic Strategies)

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PORTER'S GENERIC STRATEGIES MODEL COST LEADERSHIP

Cost leadership can be used for a low cost producer within a mass market which offers a consistent level of quality. A good example of this would be a bottled water company, where the raw material and products are very much the same for all producers. Only by having very efficient production and distribution processes can they make a profit and survive competitor threats.

DIFFERENTIATION
Differentiation is used when offering something unique that is perceived by the consumer to be better or different to other products. A meaningful point of difference could be a better taste, due to the ingredients or production process, or healthier, such as lower fat, salt or sugar. It is most likely to be the best strategy for smaller producers, as a clear point of difference must be offered relative to major brands to secure sales in a highly competitive market. Providing consumers recognize and value the point of difference, a differentiation strategy can lead to premium pricing by the producer. An example of this would be a specialty cheese producer who can command a premium price for a distinctive and sought after cheese.

INNOVATION STRATEGY
Organizations can use information systems to identify and create (or assist in creating) new products and services or/and to develop new/niche markets or/and to radically change business processes via automation (i.e., using digital modeling and simulation of product design to reduce the time and cost to the market (Chui & Fleming 2011). They also can work on new initiatives of establishing pure online businesses/operations. At the same time, the Internet and telecommunications networks provide better capabilities and opportunities for innovation. Combinational innovation and Open innovation are two good examples. There are a large number of component parts on the networks that are very expensive or extremely different before the establishment of the networks, and organizations
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could combine or recombine components/parts on the networks to create new innovations (Manyika 2009). Meanwhile everyone is connected via personal computers, laptops and other mobile devices through cabled Internet or wireless networks or mobile networks, there are plenty of opportunities to co-create with customers, external partners and internal people Unique products, services, or markets radical changes to business processes. Example: Amazons online, full-service customer systems.

GROWTH STRATEGY
Organizations can use information systems to expand domestic and international operations or/and to diversify and integrate into other products and services, i.e., establishing global intranet and Global operation platform; establishing Omni channel strategy to Gain growth (Omni-channel strategy looks at leveraging advantages Of both online (or digital) and offline (or non-digital) channels) (Rigby 2011). Expand companys capacity to produce, expand into global markets, Diversify into new products or services. Example: Wal-Marts merchandise ordering via global satellite tracking

ALLIANCE STRATEGY
Organizations can use information systems to create and enhance relations with partners via applications, such as developing virtual organizations and interorganizational information systems. Establish linkages and alliances with customers, suppliers, competitors, consultants, and other companies, includes mergers, acquisitions, joint ventures, virtual companies Example: Wal-Mart uses automatic inventory replenishment by supplier These strategies are not mutually exclusive, organizations use one, some, or all, a given activity could fall into one or more categories of competitive strategy, not everything innovative serves to differentiate one organization from another; likewise, not everything that differentiates organizations is necessarily innovative.

A Focus strategy narrows in on a specific market segment and attempts to achieve a cost leadership and/or differentiation in that segment. For example,
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a cake producer may decide to focus on gluten free cakes to achieve a point of differences and will invest all their efforts and resources into that narrow market sector. By focusing their efforts, they become experts in their field, with a superior product development capability a knowledgeable sales team and more enjoyable products. They can develop significant competitive strengths which competitors will find it difficult or expensive to copy. This enables a business following a Focus strategy to charge higher prices without threat from competitors. Even so, such companies must still carry out competitor analysis to ensure competitors do not enter this profitable market sector.

Dominant Economic Indicators 1. Market Size:

The cell phone industry is one of the fastest growths besides the Internet. Cell phones have gone through a huge change and its market has expanded globally. Since 1994, the cell phone industry has increased from 24 million to about 182 million in wireless phone and related devices operating in the United States with some 162-million mobile-phone users in the United States alone. The cell phone market is increasing very fast with todays ever-emerging technology and innovation in improving cell phones. Today, society is living with advance technology and everyone wants to keep pace with the new technologies. Cell phone industry is growing larger because it has become a necessity. Parents are getting mobile phones for their teens because they want to communicate in case of an emergency and the wireless carriers have made it easy to add users to their existing plans. And carriers are becoming successful in getting parents to expand their plans to include their teens. This increases buyers and increases market size worldwide.

SCOPE OF COMPETITIVE RIVALRY:

The cell phone industry has become increasingly larger within the last three years as a result of more affordable cellular phones as well as lower service costs. Companies are competing in an advance technology and communication sector in which success attracts customers to buy their products and services. The market is very
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competitive because they offer the same products and services, but has different physical attributes to the phones and different costs, which buyers have choices to choose from. Companies want to provide the best products and services to attract buyers by lowering cost and improving products, which makes the cell phone industry very competitive. Here are the main factors of competitive rivalry: Cell phone cost Customer wants better services and products at a lower cost. Bundle functions into just one cell phone: For example E-mail, text messaging, internet New technology improvement: For example camera phones Better landline services

Stage in Life Cycle:

The cell phone industry is in the Mature Life Cycle Stage, where nearly all-potential customers are already users of the industrys product. The cell phone industrys growth and profitability depends entirely on its ability to attract new customers. By increasing and improving the cell phones and services, it will attract more potential buyers, because technology alone will not attract buyers, instead companies want value-added services for mobile-phone securities. Cell Phone companies attract buyers in two ways during the Mature Life Cycle State: Service: Making cell phone more affordable will attract buyers to buy more cell phones and increase competition between companies to lower service fee. Innovative Phone Style: The new designs and improvement in the physical appearance of the cell phones, and more add-on features attracts customers to buy it at a higher rate.

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INTRODUCTION
The following report details cell phone industry analysis, which deals with cell phone manufacturers as well as cell phone services. This analysis includes the dominant economic characteristics, Six Forces of Competition (Porters Five Forces of Competition), driving forces of the cell phone industry, strategic mapping of company strengths, the ease entry and exit into the cell phone industry, and the overall industry outlook.

NUMBERS OF COMPANIES IN THE INDUSTRY:

There are over 50 companies with only six top companies in the cell phone industry that controls 80 percent of the market. Even though there are emerging new companies into the market, they are relatively small. The six top companies are rank as follow as the largest to the smallest cell phone company:

1. 2. 3. 4. 5.

Verizon Wireless Cingular Wireless AT&T Wireless Sprint Wireless Nextel Wireless 6. T-Mobile Wireless
Verizon is the number one largest company having 38.9 million U.S. customers. Some companies have suffered low profitability for merging with another company, which resulted in only four of the six companies that controls 80 percent of the market. The following companies merged resulting in only four companies; Sprint merged with Nextel, and Cingular bought AT&T.

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Below are financial highlights showing how well the four cell phone service companies that are occupying the market are faring. Financial Highlights Sprint Verizon Cingular T-Mobile

Revenue

34680.00 M

27662.00 M 19436.00 M

9366.00 M

Revenue year)

Growth

(1 26.40%

23.00%

25.50%

12.10%

Employees

79,900

49,800

70,300

22,616

Employee growth (1 33.40% year)

13.40%

78.40%

5.10%

CUSTOMERS:
Cell phones are attractive targets that are small, expensive, and useful. Today there are approximately 162 million mobile-phone users in United States alone. With the list of features and data applications available on mobile phones, which is continuing to grow and emerge; cell phones are not only a luxury but also necessity. Cell phone
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users use cell phones for more than just talking; the mobile services consumer wireless usage study found that 56 percent of customers used their cell phones as cameras, clocks, calendars, music players, and other non-talk functions. Also, most cell phone owners are between the ages of 18 to 34. However, consumers dependency on cell phones can pose a threat that force users to be victims of paying too much for cellular phone services. There are numerous complaints about low quality service in the industry due to the competition between companies. By lowering costs for the services, the company will lose profits and reduce their shares. Customers today, typically complain about the high cost for the services of having to stay on a contract for a long time and paying an early cancellation fee. Also, with low service line, customers rather pay higher price for better services such as receptions. Cell phone companies know that consumers dislike mobile-phone services. In fact, mobile phone services were the second lowest-ranked industry. Mobile companies were also the number two sector in complaints in 2005. Many companies claim that consumers love their cell phones and that theyre very happy with the services, which is a half-truth. Consumers complain frequently about dropped calls, lousy customer service and exorbitant penalties from exiting a contract. A new option in cell phone usage has come into being, which lets subscribers keep their old numbers when switching carriers. About 47 percent of all cell phone customers would switch or consider switching cell phone service carriers just to get a lower rate and better service so they do not have to pay an average fee of $170 to cancel their service contract. Here are some key findings about consumers response to cell phone services and early termination fees: The fees for switching to a new cell phone company that provides lower rates and better services discouraged 36 percent of cell phone customers from switching. 89 percent agrees that early termination fee is a penalty to discourage switching cell phone companies. Cell phone early termination fees costs consumers more than $4.6 billion from 2002 to 2004 47 percent of consumers would consider switching if early termination fees were eliminated
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Here are the primary conclusions regarding cell phones: Cell phone companies early termination fees creates captive customers The fees inhibit competition in the cell phone industry Customers are well aware of the early termination fees as penalties rather than rates.

TECHNOLOGY/INNOVATION:
Technology and innovation are advanced every year making the industry even more competitive. Cell phone companies that design and make evolutionary upgrades are emerging into the market to be more competitive. Here are some new technology and innovations on cell phones: Unlicensed Mobile Access (UMA) will help those who have high-speed Wi-Fi routers overcome poor reception coverage in their houses or apartments. This is also a way for mobile carriers to expand without spending a lot of money on new infrastructure. It enables lots of users who use handsets to wirelessly download content at broadband speeds while traveling. Cell phone tour guides: Provides buyers with guides of places they want to see. For example. Weavers and Stillers voices are used as narrators in Talking Street that shows a series of cell-phone tours from Manhattan to the World Trade Center. The technology is meant to be more vivid and more exciting than books or live tours. Some in the industry believe that this new technology saves time and money. Also, not all mobile-phone tour services charge a fee for using the service. Motorola iTunes phone is basically a hundred-song iPod shuffle built into it. This is killing the iPod mini because it is a value-added upgrade in which you get both the cell phone and songs together. Near Field Communication (NFC) technology lets wireless devices connect to other devices nearby and transfer data, which ranges from payment information to digital pictures. Building cell phones with embedded NFC chips could double when used as debit cards or electronic IDs. For example, in Japan and Korea, users can charge their phones with virtual cash; by waving their cell phones near an NFC-enabled machine to buy anything from a soda to lunch. This means NFC devices from different manufacturers must be interoperable
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and integrated to work with the credit card infrastructure and also, it requires working with Visa to encourage support of the new technology. A new launch for SkypeIn and Skype Voicemail are built by the same company, which makes the Skype software, and it allows internet users call one another for free anywhere in the world. With SkypeIn built into the latest version of software, it allows users to get regular phone numbers and can receive calls from landline or mobile phones without having to pay roaming charges. Users can purchase up to three numbers in their home country. Skype Voicemail allows users receive voicemail message for up to ten minutes from any user or traditional phone. These two technologies enhance the basic free Skype and gives friends, family, and colleagues not connected to the internet an inexpensive and convenient way to contact each other in their global base. VOIP on mobile phones will help cut cell-phone bills most of all for international users based on the assumption that if consumers are already paying for a data plan, will route international calls over their phones data connection using VOIP and can save considerable money. Mino Wireless offers VOIP calls at 2.2 cents a minute to 40 countries and is the first to introduce VOIP on mobile phones in the U.S. market. It mainly targets travelers, immigrants, and students from overseas. Using Mino, consumers should have services from Cingular, Nextel or T-Mobile, a data plan, and an upto-date phone that can run Java. The company claims to have 20,000 users since they are launching their service in January. There is a lot of competition in VOIP as well because cell phones carriers are interested in VOIP. VOIP can be implemented but the common concern about implementing VOIP is voice quality and the ability to provide value-added services such as voice mail.

PRODUCT CHARACTERISTICS:
In the cell phone industry, the products and services are highly standardized. In the past, the products differentiated in cell phones and services. Today, with more technology enhancement, the products in different companies are essentially similar. Since this is a cell phone industry, there is a maximum amount of products and services that consumers can choose from. Yet, consumers do not want to purchase cell phones at a higher price value unless the companies are able to make it attractive.

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CAMERA CELL PHONES:

The key factor consumers consider when choosing a device is their context. Phones with the ability to take images, both still and video have captured about 40% of the wireless phone market. But despite the products popularity, customer users want higher resolution, the ability to use storage media, and many other state of the art features found in modern digital camera. With consumers desire for high resolution digital camera, the market for camera and camcorder phones will peak in 2009. Nowadays camera phones are the rage in markets all around the globe because consumers are attracted to the convenience of having an imaging device with them at all times. The business model is focused on users displaying and sending images wirelessly. As advanced 3G networks are implemented in the coming years, the advance higher resolution camera phones will likewise become very popular. There are three critical pieces to this type of phone: 1. The device (phone) 2. The application (picture taking) 3. The network (3G) The introduction of 3G network will accelerate the adoption of the camera phones. Why? Because the timing is right for digital imaging to become part of the cell phone industry, especially in new cell phones and new networks. Camera phones would not work with older phones and networks, because there are small monochrome displays and little storage, and the speed to transmit a digital photo would take a long time. Just as important is improvement to camera phones, new advanced third generation wireless network (3G) will enable the cost effective transmission of these higher-resolution images. Purpose of migrating to 3G is to enable users to spend more time using their multimedia phones every day by enjoying the world and keeping in touch with their friends and families. Here are characteristics of the 3G network on cell phones: The 3G networks are able to transmit at 380 K bps. There is also improvements on the image to 330,000 pixels Internal storage grew so consumers could store a dozen photos on their phone. This means better pictures, better experience, and consumers bought them by tens of millions of cell phones around the world.
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Consumers do not have to pay extra for the camera features; they will get the camera as part of the phone. Although camera phones are great to take pictures, consumers use them as wallpaper and screensavers instead of printing. This is how consumers change the way they interact with digital technology. Today, camera phones are so popular that every cell phone company or provider offers them. Features on all cell phones are similar. If consumers were to just buy cell phones for their features, consumers can find a similar phone in other companies as well. This makes the industry very competitive which drives companies to lower product cost and service cost in order to bring large volumes of consumers. Although camera phones are very popular, one factor that makes consumers dissatisfied is the picture quality, which is limited when these images are printed or sent: Vast majority of users use high-resolution camera in addition to their camera phones. 3% of consumers use their phone as their only digital camera Most consumers take fewer than 10 pictures with their camera phone each month Fewer than 2% of consumers say they will consider a camera phone with less than one mega pixel 50% of consumers say they would only consider a handset with more than two mega pixels of resolution.

DOWNLOADABLE APPLICATION:
Cell phones are programmed allowing users to download applications onto their cell phones. Such common downloads are of games such as JAMDAT Bowling. Most applications are large, between 40 KB to 550KB, and with applications ever growingin-size and very-more-appealing, better multimedia and larger memory in the phones, and better network capabilities for economic high-speed data access.

VIDEO (STREAMING):
Video Streaming is when videos are sent over a wireless network to a cell phone. The Video streaming with 3G helps in ways that is usable and cost effective by the consumer, and economical viable for the wireless operator.

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INTERNET ACCESS VIA PC CARD:

Wireless PC Cards in smaller form will be produced for handhelds. IT wants access through the internet at the fastest data rates possible, and at the lowest costs. Operator wireless also wants to keep consumers happy with internet access which will maximize revenues and reduce their costs. Here are some new cell phone models currently in market today:

MOTOROLA RAZR:
Motorola Razr is the latest fashion cell phone of 2006. It is a flip clamshell design, quad band cellular plus standard features in most GSM cell phones.

LG THE V:
The new product is a smart clamshell design with small but useable QWERTY keyboard, high resolution camera, MP3 player, and a mini SD (songs).

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EMERGENCE OF GLOBAL ECONOMY

In order to succeed in global economy real time transmission information is very important that will lead to respond to this changed world quickly. More capabilities and availabilities of internal digital communication facilities will increase the participation of economy towards globalization and its benefits. As more firms enter in globalization through alliances there is more chance that firms can get accurate and timely information. Information technology becomes more attractive in capital intensive countries like U.S where cost of labor is high and new technology might not be that mush important for labor intensive countries like China, India and Pakistan where one can find cheap labor as compared to capital incentive countries. Globalization IS allow centralized decision making as managers can assess information and made decisions more quickly. Globalization also encourages making strategic alliances to form global partnership. This global partnership also allow to small firms to contribute their small portion of products as supplement.

TRANSFORMATION OF INDUSTRIAL ECONOMIES

Today Western economies are using knowledge based sources to produce goods and services for their wealth creation. This transformation to knowledge based economy augmented the importance of IS as these knowledge based products and services are delivered digitally. This transformation also changes the source of competitive advantage and intangible assets of knowledge and intellect abilities act as the basic supplement to competitive advantage. On the other hand communication is found the most important operation in this respect and efficient marketing strategies are needed to find new customers. Small and medium firms can also access worldwide markets as communication over internet is very cheap. Increased competition has increased innovation that leads to fade and product life cycles are becoming shorter.

SCALE ECONOMIES
There are two types of economies of scale pertaining to the cell phone industry. They are the internal and external economies.

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INTERNAL ECONOMIES
Internal economies of scale are economies made within a company as a result of mass production. So as a company produces more and more products and services to consumers, the average cost begins to fall so the companies should focus on the following six factors: A technical economy: when the companies use its entire means to generate revenues and increase profitability. This includes spending a large amount of money on capital to start the company. Managerial economies: when the company splits up managerial duties to meet specific company goals and values. This in turns helps to complete specific tasks and improve the company to better service consumers. Financial economies: cell phone companies borrow lots of money to purchase capital in order to create products for consumers. Marketing economies: where cell phone companies spends a lot of money to advertise their products and services on television and in newspapers every day to reach consumers across nations. Companies resorts to marketing in hope of attracting more consumers to try their products and to generate higher profits and revenue. Commercial economies: cell phone companies order their products and supplies in bulk at a lower rate rather than buying them separately. Research and development economies: the cell phone companies are continuously developing new and advance technology cell phone to be in pace with the competitive market.

EXTERNAL ECONOMIES
The external economies are made outside of the company as a result of its location. Most cell phone companies have a corporate headquarter that concentrates on the following to keep track of the companys progress. Cell phone companies have licensed franchises that operate to sell products and services to consumers. They have a network that connects them to manufacturers, service carriers, and main corporate officer that is the backbone of the stores and products it sells. The cell phone companies works closely with service carriers to provide phone service such as clear phone calls, not lost calls, and good receptions. The companies work and communicate directly with manufacturers reputable for the new phones enhancement, upgrades, and features.
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LEARNING & EXPERIENCE EFFECTS

The major complaint found in the cell phone industry was cost and services. So to improve their service, the company has increased the training for customer service employees to 10 days a year, and introduced a new plan to address common complaints; also tied executive compensation to customer satisfaction. There are more options that buyers can choose from, whether it be the actual phone itself or the service plan. Companies are now giving customers a series of contract terms and costs as well as giving them a sample of how their first bill will look like so they understand the contract before signing it. Service carrier is a very important factor to maintaining consumer satisfaction and to keep consumers. With that, companies are all pushing new data services for business customers to increase new revenue sources.

CAPITAL REQUIREMENTS
The cell phone companies require large capital to enter and remain in the market successfully. Companies require capital to create products that attracts consumers and for total assets and revenues to enlist other products and services that are featured with cell phones. Cell phone companies work with manufacturers to create new technological and innovative cell phones in the market today to attract consumers. A valuable capital in the cell phone industry is the consumers because revenue and profits depends on them who buy the companies cell phones. New products are introduced continually, technology evolves on a daily basis, and customers are eager to become part of the future of a wireless society. This makes the market very competitive and large companies that have big economies of scale provide a highly automated service to a large number of customers, and have the financial resources required in building and maintaining a large network of communications devices. Smaller companies can also compete, but only in small markets or by provide specialty services. Total capital requirement to start a business in selling cell phones requires a capital investment between $50,000 to $90,000, and liquid capital requirement of$40,000 to $50,000. In addition, companies spend millions of dollars on developing brand name recognition, and promoting and marketing their products. Companies also
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want to spread their companies out through franchises, because more offices mean more visibility in drawing consumers in to buying their products and services.

INDUSTRY PROFITABILITY
The cell phone industry will remain a competitive market and will increase continuously with a total of 1,200 wireless companies with total annual revenue of $100 billion. The profitability of individual companies is driven mainly by their ability to develop new products, providing better service, making their products affordable for consumers. Profitability of companies is achieved also by taking advantage of marketing their products, have access to capital, and by inquiring the expertise to improve the cell phones. The profitability of the cell phone industry is dependent on the volume of consumer they can attract. The profitability of companies has increased drastically and will continue to increase as new cell phones are improved. The financial markets of cell phone companies seem to increase fast because of the new technologies and services that companies are offering consumers, and at the same time they compete for customers. Although there are complaints and dissatisfaction from consumers, cell phone and the service along with it has become a necessity which companies use as an advantage by charging consumers higher price. As in any industry, there are declining and inclining profits. The cell phone has experienced a slight decline; worldwide shipments of cell phones rose 26 percent in the first quarter compared with the same period last year. Currently today, the global market continues to thrive on consumers replacing older phones with new purchases, a total of 226.7 million mobile phones. For individual company profitability, Nokia is listed at the top, retaining a third of the global market share and enjoying a 39.6 percent growth. Motorola also had a high increase of 60.6 gains and is controlling 20.3 percent of the market. Samsung has shipped over 29 million phones and is in third place with a decrease in sale to only 18.4 percent growth. LG came fourth for market share with 6.9 percent and experienced an operating loss for the quarter due to marketing expenses and fewer sales. The cell phone industry looks strong and competitive between the companies and service they provide. Even more as new options are in place, such as, allowing consumers to keep their numbers while switching carriers.
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SIX FORCES OF COMPETITION

When compared to the general environment, the industry environment often has a direct effect on the firms strategic actions. Our textbook discusses Porters five forces of competition in most industries. However, in analyzing the Cell Phone Industry, not only do we cover the five forces model which includes.

The threat of new entry The power of suppliers The power of buyers Product/Service substitute The intensity of rivalry among competitors Stakeholder group the Unions.

THREAT OF NEW ENTRANTS

The cell phone industry is highly concentrated. Following the recent Sprint/Nextel merger, only four firms actually control 80% of the current market. Since start-up costs for a cell phone service provider are extremely high, the threat of new entrants is low. A great sum of money must be invested to attain the economies of scale, and it is difficult to enter the market with existing firms already operating on cost and differentiation strategies.

BARGAINING POWER OF SUPPLIERS

Cell phone operators provide such high volume orders that suppliers have been cautious not to temper with the relationship and ended up being in a low bargaining position. Already dragging with the specter of gadget gridlock, carriers continuously seek for ever more features in the handsets and threaten to increase the pressure on suppliers with the reverse e-auction. T-Mobile is the first carrier, who has staged an online bidding war, asking six vendors to bid against each other online for a contract to build cell phones for one handset segment. Christian Dupont, director of Texas Instruments Inc. refers reverse eauctions as devastating for technology companies. He comments that this trend
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hinders operators and handset vendors to build trust and keep companies that thrive on innovation from bringing value to the industry.

BARGAINING POWER OF BUYERS

The Florida PIRG Education Fund Report revealed how cell phone early termination fees hurt customers. Their research showed that half of cell phone users would switch carriers if they did not have to pay contract termination penalties. Feeling locked in a cell, most consumers resent the $150 - $240 penalties per phone, should they consider changing to another carrier for lower rate or better service. The report also indicated that $4.6 billion have been paid in the last 3 years due to penalties thats $2.5 billion in actual penalties and $2.1 billion in lost services from consumers who either cannot afford the penalty or didnt think its worth paying. This clearly suggests that buyers/consumers have little bargaining power in this end.

THREAT OF SUBSTITUTE PRODUCTS/SERVICES

A lot of active research and development into mobile phone technology has been underway: Operators are upgrading their networks to advanced wireless and other thirdgeneration (3G) services, many new entertainment and communications services are becoming available, including new broadcast-type operations on spectrum formerly occupied by Television channels 52-69. With downlink speeds close to that of wire line DSL, mobile service can now provide music download and streaming video sharing. Services such as MobiTV or Juice Caster are some applications that leverage these new networks. Development in miniaturized hard disks and flash drives to solve the storage space issue are already surfacing, therefore opening the possibility for phones to become portable music libraries and players similar to an iPod. Some cell phones already have GPS positioning. In the future, this may be coupled with accelerometer positioning, to cover underground or indoor positioning. This would lead to maps and help finding group members nearby, or identifying strangers. When coupled with camera phone, the GPS

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technology may also allow users to take a picture or snap the exact location and angle at which the picture was taken.

INTENSITY OF RIVALRY AMONG COMPETITORS

The landscape of mobile wireless industry has changed much in recent years. Last year perhaps is better described as the mating season for U.S. phone companies: Sprint and Nextel Communications Inc. together created a leading carrier augmented by a global IP network that offers consumer, business, and government customers broadband wireless and integrated communications services. The two companies combined as Sprint Nextel has a combined equity value of about $70 million and serve over 35 million wireless customers on their networks and 5 million additional customers through affiliates and partnership. The merger covers directly nearly 262 million customers, more of U.S. population than any other carrier. A little earlier, AT&T Inc., formed by SBC Communications purchase of AT&T Corp. created the then largest wireless phone company. Cingular Wireless won that distinction after its takeover of AT&T Wireless for $41 billion. Mergers lead to concentrated pricing power in the hands of fewer companies. When one phone company owns another phone company, the total savings to the company through the synergies are substantial, but the potential for competition is undermined.

UNIONS:
Walt Disney Co. announced that it has reached a deal with the Hollywood unions that will put the mobisode spin-off of the ABC hit series Lost Video Diaries back on track. The series will air as mini-episodes on mobile phones, with distribution via Verizon, Disneys mobile partner, by the year-end. The Screen Actors Guild (SAG), The Directors Guild of America (DGA) and the Writers Guild of America (WGA) all submitted an agreement for establishing a template to ensure compensation of future programming on new digital platforms. The agreement calls for residual payments once the mobisode has been available for
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over 13 weeks on cell phones. The DGA and WGA members will get a pay residual similar to the TV residual in their main contracts - it works out to the 1.2 % license fee for use on cell phone. As far as actors are concerned, the contract provides an escalating minimum wage that starts at $425 per 8-hour day, dating back from April 1, and increases to $450 in a year. On the day before the expiration, the rate quickly jumps to $759, enabling SAG to bargain further from the higher rate. The contract will expire the same time as SAGs Television Agreement and Codified Basic Agreement, potentially giving the union more leverage. As DGA president Michael Apted expressed, This deal marks the first of many to come and illustrates how by working together with producers, we will achieve agreements that are mutually beneficial. By any measure, the cell phone industry is one huge success story of the digital age.

COMPETITIVE POSITION OF MAJOR MOBILE PHONE MANUFACTURERS:

The vertical axis represents the total amount of Net Income earned by each mobile phone maker. The horizontal axis represents the market capital each company has worldwide. The circles represent the total assets each mobile phone maker has. The figure represents financial position of each company.

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Net Income

4.5 B Motorola Nokia

4B

3.5 B

Siemens Ericsson 3B 60 B 70 B Market Capital 80 B 90 B

Page 25

Nokia Market Capital Employees 94.06B 58,874

Ericsson 56.82B 56,055 15.80%

Motorola 56.34B 69,000 22.70%

Industry 179.33M 260 15.90%

Qtrly Rev Growth 28.50% (yoy)

Revenue (ttm) Gross (ttm)

46.23B

20.78B 45.75%

38.70B 31.48%

81.02M 37.72%

Margin 34.34%

Oper (ttm)

Margins 13.24%

20.21%

11.23%

1.69%

Net Income (ttm) 4.80B

3.33B

4.59B

729.70K

EPS (ttm) P/E (ttm) PEG (5 expected)

1.12 20.54 year 1.76

2.09 17.14 1.78

1.797 12.54 1.68

0.07 27.85 1.57

P/S (ttm)

2.03

2.77

1.44

1.99

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 Among the four major cell phone makers, Nokia has the most market capital and net income, which makes Nokia the largest cell phone maker in the world. Motorola comes into second in net income. Nokia has the best Price/Earnings ratio, which means Nokias stock has the relative high earning per share. Ericsson has the highest gross margin. Gross margin (gross profit / sales revenue) is a measure of a company's efficiency in turning raw materials into income. In other words, Ericsson is most efficiency in turning raw materials into income.

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COMPETITOR ANALYSIS OF MOBILE PHONE MANUFACTURERS NOKIA:

Nokia, a Finnish cell phone giant, has become the world's No.1 maker of cell phones, ahead of rivals such as Motorola, Samsung and others. The company's products are divided primarily between four divisions: mobile phones (wireless voice and data devices for personal and business uses), multimedia (home satellite systems, and mobile gaming devices), networks (wireless switching and transmission equipment used in carrier networks), and enterprise solutions (wireless systems for businesses).

Nokia wants to be the leader in third-generation (3G) wireless network equipment.

Company Type

Public (NYSE: NOK1V)

NOK;

Helsinki:

Fiscal Year-End Sales (mil.) 1-Year Sales Growth Net Income (mil.) 1-Year Net Income Growth Employees 1-Year Employee Growth

December $40,465.0 2.1% $4,280.0 (1.5%) 58,874 6.1%

The company has slowly becoming the supplier to half of the world's commercial 3G networks. By doing so, Nokia swims to the top of the wireless network infrastructure
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market led by Ericsson. To capture the international market, Nokia rolled out new business and consumer models with color screens worldwide. The company also gained a piece of the Chinese market by delivering a unit of models capable of English and Chinese text recognition to be sold by vendors in China.

MOTOROLA
Motorola is the No. 2 manufacturer of wireless handsets after global leader Nokia. After a previous reorganization, its remaining operations have been focused in four business segments: connected home solutions; government and enterprise mobility solutions; mobile devices; and networks. The company generates nearly 60% of sales through the manufacture and sales of wireless handsets and related products.

KEY NUMBERS
Company Type Fiscal Year-End Sales (mil.) 1-Year Sales Growth Net Income (mil.) 1-Year Net Income Growth 2004 Employees 1-Year Employee Growth Public (NYSE: MOT) December $36,843.0 17.6% $4,578.0 198.8% 68,000 (22.7%)

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KEY PEOPLE
Chairman and CEO EVP and CFO EVP and CTO SVP and CIO SVP and Director, Global Government Relations Organization Edward J. (Ed) Zander David W. Devonshire Padmasree Warrior Patricia B. (Patty) Morrison Michael D. (Mike) Kennedy

ERICSSON
Ericsson, a company base in Stockholm, Sweden, is the worlds leading maker of wireless telecom infrastructure equipment. Ericsson is also a top cell phone maker and seller through its joint venture with Sony, Sony Ericsson. The company's other products include corporate networking gear, cable, defense electronics, and software for mobile messaging and commerce.

KEY NUMBERS
Company Type Fiscal Year-End Sales (mil.) 1-Year Sales Growth Net Income (mil.) 1-Year Net Income Growth Employees 1-Year Employee Growth Public (NASDAQ: Stockholm: ERIC) December $19,099.0 (4.3%) $3,059.0 6.4% 50,534 (2.0%) ERICY [ADR];

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KEY PEOPLE
Chairman EVP, CFO, and Head of Group Function Finance EVP, Group Function Sales and Marketing EVP, Group Function Sales and Marketing SVP, CTO, and General Manager, R and D Michael Treschow Carl-Henric Svanberg Karl-Henrik Sundstrm Bert Nordberg Hkan Eriksson

OTHER MANUFACTURERS: LG
Founded in 1947 as Lucky Gold star, LG Group consists of more than 30 affiliated companies that operate through more than 300 offices around the globe. LG Group's companies operate in more than 120 countries. LGs annual sales in 2004 have reached $798.8 million (Hoovers). The Group and its former partner, GS Holdings, are headed towards a competitive showdown in the fuel cell and rechargeable battery markets.

SAMSUNG:
Samsung Electronics Co., Ltd. is the world's top maker of dynamic random-access memory (DRAM) and other memory chips, as well as all sorts of electronic gear including LCD panels, DVD players, and cellular phones. The Korean companys sales in 2004 have reached $ 78,250.1 million (Hoovers), a number that worth a big celebration.

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COMPETITIVE PROVIDERS
Net Income

POSITION

OF

MAJOR

WIRELESS

SERVICE

6B Verizon

4B

AT&T 2B

Sprint Nextel -700 M

Qwest

20 B

50 B Market Capital

80 B

110 B

The vertical axis represents the total amount of Net Income earned by each wireless service provider. The horizontal axis represents the market capital each company has. The circles represent the total assets each wireless service provider has. The figure represents financial position of each company.

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Verizon Market Capital Employees Qtrly Rev Growth (yoy) Revenue (ttm) Gross Margin (ttm) Oper Margins (ttm) Net Income (ttm) EPS (ttm) P/E (ttm) PEG(5year expected) P/S (ttm) 93.05B 217,000 25.10%

AT&T 101.30B 189,000 54.50%

Qwest 12.17B 39,000 0.80%

Sprint Nextel 72.97B 79,900 66.50%

Industry 350.37M 800 2.90%

79.68B 64.74%

49.45B 56.05%

13.93B 58.23%

39.29B 59.34%

237.24M 55.19%

18.85%

16.19%

8.08%

10.05%

10.82%

7.31B

5.35B

-726.00M

1.74B

-318.91K

2.571 12.41 4.74 1.18

1.519 17.19 1.57 2.05

-0.404 N/A 48.15 0.89

0.710 34.63 1.03 1.89

N/A 15.02 4.07 1.70

Among the four competitors in wireless service market, Verizon take the lead, which it has the most net income and second most market capital. Whereas AT&T has the most market capital. Sprint Nextel has the best Price/Earnings ratio, which means Sprint Nextels stock has the relative high earning per share. Verizon has the highest gross margin. Gross margin (gross profit / sales revenue) is a measure of a company's efficiency in turning raw materials into income. In other words, Verizon is most efficiency in providing its service.

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COMPETITOR ANALYSIS OF WIRELESS SERVICE PROVIDERS VERIZON

Verizon Communications was founded in 2000 when Bell Atlantic bought GTE. The name is a combination of veritas, the Latin word for truth, and horizon. Verizon is a top US telecom services provider base in New York, New York. The company operates nearly 49 million access lines in 28 states and Washington, DC. Verizon operates in four business segments: Domestic Telecom, Domestic Wireless, Information Services, and International. The Domestic Wireless unit offers wireless voice and data services and equipment sales through the US. Its International segment has operations and holdings mostly in the Americas and Europe.

KEY NUMBERS
Public (NYSE: VZ)

Company Type

Fiscal Year-End

December

2005 Sales (mil.)

$75,112.0

1-Year Sales Growth

5.4%

2005 Net Income (mil.)

$7,397.0

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1-Year Net Income Growth

(5.5%)

2005 Employees

250,000

1-Year Employee Growth

19.0%

KEY PEOPLE
Chairman and CEO Vice Chairman and President EVP and CFO EVP Public Affairs, Policy, and Communications EVP Strategy, Development, and Planning Ivan G. Seidenberg Lawrence T. Babbio Jr. Doreen A. Toben Thomas J. (Tom) Tauke John W. Diercksen

AT&T
The company was founded in 1878 when a dozen customers signed up for the first telephone exchange in St. Louis. SBC acquired AT&T Corp. in 2005 and took that company's more well-known name as AT&T Inc. AT&T holds a 60% stake in Cingular Wireless, which has acquired AT&T Wireless in a cash deal valued at $41 billion. The deal has created the leading US wireless operator with 46 million customers in 49 states.

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Some of the companys selected subsidiaries and affiliates include:

AT&T Corp. AT&T Communications of California, Inc. AT&T Communications of Illinois, Inc. AT&T Communications of NJ, LP AT&T Communications of the Mountain States, Inc. AT&T Communications of the Southern States, LLC Teleport Communications New York Cingular Wireless (60%, joint venture with BellSouth) Illinois Bell Telephone Company (AT&T Illinois)

KEY NUMBERS
Public (NYSE: T)

Company Type

Fiscal Year-End

December

2005 Sales (mil.)

$43,862.0

1-Year Sales Growth

7.5%

2005 Net Income (mil.)

$4,786.0

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1-Year Net Income Growth

(18.7%)

2004 Employees

162,000

1-Year Employee Growth

(3.6%)

KEY PEOPLE
Chairman and CEO SEVP, Business Development COO and Director SEVP and CFO SEVP and CTO Edward E. (Ed) Whitacre Jr. James W. (Jim) Callaway Randall L. Stephenson Richard G. (Rick) Lindner John T. Stankey

SPRINT NEXTEL
Sprint Nextel combines the best of two powerhouse wireless companies. The combination of No.3 US wireless carrier Sprint with No.5 Nextel Communications has created a wireless giant that aspires to take on the wireless units of bounding former Baby Bells Verizon and AT&T Inc. Sprint Nextel has about 50 million subscribers to its nationwide digital wireless network, puts the wireless carrier behind only Cingular and Verizon Wireless in number of subscribers. The company's wireline business provides local-exchange phone services through more than 7 million access lines in 18 states.
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KEY NUMBERS
Public (NYSE: S)

Company Type

Fiscal Year-End

December

Sales (mil.)

$34,680.0

1-Year Sales Growth

26.4%

Net Income (mil.)

$1,785.0

2004 Employees

59,900

1-Year Employee Growth

(10.5%)

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KEY PEOPLE
Executive Chairman President, CEO, and Director COO CFO SVP, Corporate Strategy and Development Timothy M. Tim) Donahue Gary D. Forsee Len J. Lauer Paul N. Saleh Atish Gude

INDUSTRY TRENDS TECHNOLOGY

There is currently a variety of wireless networking capabilities that are emerging, developing, and integrating. The future of these technologies within the cell phone industry will create better, higher-speed, and longer-distance capabilities. There are two basic and current wireless systems that are already in place. One is Wi-Fi, a local wireless internet access point was limited to buildings, business and college campuses. Wi-Fi is capable of being used within the cell phone industry when the optimal technologies are created. The other is Worldwide Interoperability for Microwave Access (WiMAX), is allowing you wireless access wherever you go. There are currently three providers for the digital wireless mobile phones service that create the networks via satellite. Global Service for Mobile Communications (GSM) has internationally appeal but is the network that Cingular and T-Mobile use for their service. Code Division Multiple Access (CDMA), have better coverage in the United States and are mainly utilized by Sprint and Verizon Wireless. Integrated Digital Enhanced Network (iDEN) is only used by one carrier, Nextel. The other smaller and regional carriers such as Virgin Mobile, U.S. Cellular, MetroPCS, and Alltel use CDMA. The newest trends plan to integrate their technologies in the cell phone industry. Voice over Internet Protocol (VoIP) allows you to make telephone calls using a computer network, or a data network like the Internet. VoIP converts the voice
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signal from your telephone into a digital signal that travels over the internet then converts it back at the other end so you can speak to anyone with a regular phone number. This new network may also allow you to make a call directly from a computer using a conventional telephone or even a microphone. Ultra-Wideband (UWB) also work with the PC or laptop and offers a cost effective, easy way for consumers to wirelessly transfer data, images or audio from their phone to another source, such as the laptop. Global Positioning System (GPS), this service is already equipped in most motor vehicles, and will soon be a feature provided by cell phone service providers enabling users to find the their own location, or access a mapping service. Although the system currently uses satellites, it is preparing to use existing TV antennas to send out signals. This service is set to hit the market by June through Disney, so parents can electronically locate their children. With all these emerging and current wireless systems in place, the wireless phone companies are panicking in preparation for a major shift in the cell phone industry. They are worried their customers may start using VoIP services like Skype, as Wi-Fienabled phones become more common and are lining up behind Unlicensed Mobile Access (UMA). UMA would allow calls to move seamlessly from the GSM cellular network to Wi-Fi networks. Most important to the cell companies, it would let the operators retain control over the call and charge the customer for the minutes used. But, with Skype and some other VoIP services, customers would be able to call for free once their phone is connected to a Wi-Fi network. Some U.S. cities are now proposing free citywide Wi-Fi services, which could mean billions in lost revenue for the cell phone industry.

PHONE DESIGN
Cell phones will become much more powerful, and designs will continue to morph into ever more complex, multi-purpose personal communication devices, including the growing use of the cell phone as a financial transaction device (see Mobile Commerce below). Batteries for wireless devices will begin to last much longer as well.

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MERGERS
AT&T and Cingular merged in 2004 and recently the merge of Nextel with Sprint also created a larger company. Mergers negatively impact customer attitudes and perceptions with their wireless service in the short term, creating a sense of confusion and uncertainty. Nextel and Sprint actually experienced the largest 2005 declines compared to their overall satisfaction index ratings in 2004, most likely due to the adverse effects of the merge. Yet carriers not involved in mergers also experienced some decline in overall satisfaction, with the gap between customer expectations and actual service experience widening. Evidence of this can be seen in the 5% increase of intent to switch carriers in the coming year, which was a reverse trend from the past two years, where future switching intent was stable.

MARKET GROWTH
Although cell phone markets are relatively mature in the U.S. and in major developed nations everywhere, the number of subscribers nonetheless continues to grow in these countries. In the U.S., new subscribers tend to be those on lower-cost plans and children. Already, 40% of 12- to 14-year-old Americans carry cell phones; the rest of them will be soon to follow. Meanwhile, $1 billion cell phone subscribers are expected to join the craze within less developed nations worldwide. The largest nations include Sweden, the U.K, and the Netherlands followed by China and India.

SECURITY ISSUES
Security issues such as eavesdropping on Bluetooth conversations, hacking into Wi-Fi networks and viruses spread among cell phones will require more attention and investment from the technology and telecommunications sectors. The estimate is that the global market for mobile phone security software will reach $1 billion by 2008.

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MOBILE COMMERCE (MCOMMERCE)

Mobile Commerce, also known as mCommerce, will emerge and create mobile subscriptions and advertising opportunities for companies ready to embrace mobile subscribers. Consumers in nations such as Japan and South Korea have already shown that they are more than willing to access quality mobile content and next generation services on a subscription basis, including news, wireless TV, animation and filmed entertainment scripted and adapted for the small mobile screen. The cell phone can is also going to be considered a digital wallet. In Europe and Asia, many people pay at the register by reaching for their cell phone instead of their wallets. The phones facilitate transactions between the point of sale and the user's credit, bank, or cellular account. Phones from Motorola and Nokia plan to implement the system over the next year. Services will come via partnerships between local banks partnering with a service provider.

NEW SERVICE PROVIDER

There is always the potential for a newcomer to join the crowd to threaten the current providers by combining the most current technologies, with faster service, and lower prices. Pre-paid phones could become more prevalent with the right service provider that can cater to the pay-as-you-go customers. The collaboration of Wi-Fi with the potential spread of longer-range WiMAX, and the eager adoption of VoIP will threaten to turn the cell phone and landline industries upside down.

KEY SUCCESS FACTORS

There are factors that are necessary to attract customers, compete, and ultimately be successful in the cell phone industry. For a company to be successful in the cell phone industry they can create value by providing the basic features, technical features, and support to back up those features.

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BASIC
These features are assumed to be included and expected in a basic cell phone package to satisfy the simplest customers. Caller ID Line Block Call Forwarding Call Hold Call Waiting Caller ID No Answer Call Forwarding Three-Way Calling Voicemail

TECHNICAL
These features go beyond the basics and provide the technical features to attract the savviest of cell phone subscribers. Internet capabilities to receive billing, make payments, and download ringtones. Detailed Billing either in paper form or downloadable from the internet. High-Resolution Camera, most important feature among subscribers. Text Messaging, 3 billion wireless text messages are sent each month. Web Access to get stock quotes, sports scores, weather, and up to the minute news. Insurance to protect yourself in case of malfunction. E-mail Messaging can now be done from the palm of your hand NO Domestic Long-Distance Charges, not available with landlines. Ability to Download Ringtones, free is better. Battery Power is the second most important feature among subscribers. Bluetooth is wireless technology that communicates with a wireless hands-free headset. Video capability at least 15 seconds of video is the standard. Prepaid Minutes typically useful for an individual that requires minimal talk time.

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 Mp3 Capable, subscribers want to be able to use their iPods with their handsets. Ability to Record Music and play it back or use as a ringtone. FM Radio can now be transmitted through a handset. FLASH Memory Cards can hold up to 100 songs and are removable.

SUPPORT
Every company can provide the basic and technical features but the ultimate test for success or failure is decided by the support the cell phone company can provide to their subscribers. Pricing Plans that provide a reasonable amount of minutes and coordinate with the basic and technical features. A family plan allows the whole family to share their minutes on one plan. Wireless Service Satisfaction, a strong signal reception for a network is a must to provide the subscriber with clear call quality minus the static/interference, voice distortion, echoes, and dropped/disconnected calls. Wireless Customer Care Performance, the customer service is as important as the basic and technical features. Wireless Retail Sales Locations can provide a physical location to get hands on experience with a handset and face-to-face contact with a representative. Wireless Phone Handset Satisfaction can offer multiple options from size, weight, design (folding, swivel, rectangular, or sliding can affect the performance), and antenna.

INDUSTRY PROSPECTS AND OVERALL ATTRACTIVENESS FACTORS MAKING THE INDUSTRY ATTRACTIVE
As reported in USA Today, a Federal Communications Commission report stated that over the past four years landline usage has decreased by 30 million users. There are great opportunities right now to get a lower price or a lot more minutes on a cell phone. The cell phone industry is offering unlimited plans in growing numbers. The word cell phone has become a familiar usage across the globe, especially in developed countries.
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The Cell Phone Service Providers have made provisions to allow users to access the Internet through the cell phone, without taking the pain to log into their computers. Cell Phones now can be used as planner, navigation system and for games. Also, Steve Jobs the owner of Apple has enabled the innovative invention of the Motorola hybrid phone, which has an iPod with the cell phone. The cell phone is one technology where people of different ages can use without any hesitation. Cell phones are also used as fashion objects, since the styles have been changing almost every year; for example, the credit card-size Samsung SGH-P300 or Motorola Black RAZR. Also, now various ring tones of ones choice can be downloaded to the cell phone. And there is the camera phone, where a camera is attached to the cell phone, and the pictures taken with a camera phone are of good quality that can be e-mailed or even printed. The cell phone technology has infiltrated its way through the teenage population very fast. The national network, Sprint is on the verge to launch cell phones that are custom handsets, which contains phone contents such as Disney ring tones and games. This is a way where the cell phone industry can open a whole new arena for attracting a market for children. Also, there is the new culture of SMS (Short Message Service), which is a new way to send text messages. SMS is quite popular among teenagers and college students, which helps everybody to keep in touch with friends and family. Nowadays all cell phone manufactured supports SMS. In fact, the use of Internet supports the option for instant messaging, such as with America Onlines Instant Messenger. Mergers are another factor that makes the cell phone industry attractive. For instance, among the cell phone service providers, the Sprint and Nextel merger and again when Cingular and AT&T Wireless merged. It facilitates both the companies to combine both their features and produce attractive products, such as Sprints network and Nextels walkie-talkie option in the cell phone.

FACTORS MAKING THE INDUSTRY UNATTRACTIVE

Mergers might be good for the cell phone service providers, however, if the nations leading cell phone companies merge, there will be less competition in the market, causing prices to increase than before. With large mergers like Cingular and AT&T, there is the risk of a monopoly in the market, which can charge the highest possible prices to consumers. This will definitely pose a threat to consumers, because the
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number of options of choosing one cell phone service provider over another is reduced.

SPECIAL INDUSTRY PROBLEMS AND ISSUES

As with new technology, health concerns have risen with the use of cell phones. There are certain studies that show a few cases of tumors or cancer that develops as result of using cell phone for long periods of time. According to the Food and Drug Administration, these health problems are said to be caused due to the radiations emitted from cell phones. Also, these radiations tend to cause birth defects due to genetic mutation. In addition, many incidents of road hazards occur because of the use of cell phones. Many accidents involving a driver being distracted by talking on a mobile phone have begun to be prosecuted as negligence similar to driving while intoxicated. In US, many of the state legislatures, about 40, have passed laws to ban the usage of cell phones while driving. Cell phones have also been a major threat to security. There have been cases of identity theft, and also where a third party can intercept in a network listen to conversations. Also the bombings that occurred in 2004 at Madrid, was from a cell phone. So there are major security concerns of the cell phone that has to be looked into.

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PROFIT OUTLOOK
The cell phone industry has been improving through recent years due to the fact that markets have opened up to several consumers. Below are the profitability ratios of some of the known cell phone manufacturers: Earnings Per Share Profit Margin Return on Shareholders Equity Return On Assets

Nokia

1.12

10.38%

29.8%

16.2%

Motorola

1.812

12.43%

27.6%

12.8%

Ericsson

2.09

16.02%

22.1%

11.0%

Siemens

2.98

2.61%

9.5%

3.0%

Kyocera

3.30

5.90%

5.4%

3.6%

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Now almost every individual thrives to own a cell, especially in developed countries. For instance, according to industry statistics (CTIA, The Wireless Association) reveal that the number of cellular subscribers in the U.S. now total nearly 195 Million (Goodstadt). Below is a graphical presentation of a sample of households that are cell phone users in US. According to reuters.com, December 2005, the global cellular market had 2.14 billion cellular subscribers, up from 2 billion in September 2005. Experts predict 3 billion subscribers before the end of 2008. Now cell phone manufacturers are making phones that are capable of accessing VoIP (Voice Over IP), which is now a way to make phone calls free of charge, such as with what exists now Skype and Vonage. Analysts predict that this new development will help the cell phone industry profits rise, because of the newer technology; and nowadays consumers are waiting to acquire the newest technology that can help them to be more efficient.

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CONCLUSION
Important dimension of information systems, identifying competitive advantages. Enhancing competitive strategies through information systems was discussed. Organizations can apply tools such as Porters five forces and value chain to analyses their competitive position, examine their competitive advantages, and identify relevant competitive strategies. However competitive strategies alone cannot create magic. In order to meet the IS/ITs unmet potential, both IS/IT and non-IS/IT executive need to work hard to have better understanding each others areas. The transparency in the planning and execution of information systems projects should be visible to business leaders. Accountability of information systems projects should be applied to both information systems and business parts in the organization. Information systems can play a very important role in the success of organizations competitive strategies. In recent years, cell phones have turned out to be a necessity rather than a status symbol. Nowadays, cell phone manufacturers are producing different phones that fit different needs; and also, service providers have different plans for customers to choose from. With the advance in technology, consumers are able to experience the ease in communication. From 1994 onwards, the cell phone industry has seen great success through the years, and analysts predict that this growth is only going to increase with the advancement of technology.

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REFERENCES:
Emery, J.C. (1987), "Management Information Systems: The Critical Strategic Resource", New York: Oxford University Press Porter, M.E., Millar, V.E. (1985), "How information gives you competitive advantage", Harvard Business Review, Vol.62, No.4 Rack off, N. Wise man, Ch., Ullrich, W.A. (1985), Information Systems for Competitive Advantage: Implementation of a Planning Process, MIS Quarterly http://www.firstresearch.com/Industry-Research/TelecommunicationServices.html http://cellphones.about.com http://hoovers.com/ericsson-inc. http://hoovers.com/lg-group. http://hoovers.com/nokia http://hoovers.com/motorola http://www.wired.com/news/technology http://www.mobiletrax.com http://www.bized.ac.uk/learn/economics/firms/economies/notes.htm#Heading42 Wiseman, Ch. (1985), "Strategy and Computers: Information Systems as Competitive Weapon", Dow Jones Irwin, Homewood

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