As the economy nosedives, the best prospects for cellcos lie in the handset.
Growth drivers are already thin on the ground in the telecom business. In the current environment, service providers have no idea what the next 12 months will hold. Infrastructure vendors Ericsson and Nokia Siemens are predicting flat growth in 2009.
What action there is will be driven by the device and - more important - applications on the device.
A US Consumer Electronics Association survey of buying intentions found that, compared with last year, growth in gadget sales in the Christmas quarter will halve to 3.5%. A good deal of that will come from mobile, with a forecast 11% rise in sales.
Handset leader Nokia and even loss-making Sony Ericsson are expecting higher unit sales for this quarter, at admittedly lower margins.
Shift to apps
But I'm predicting that whatever boost they get, the iPhone, the buzz it has created and the new business models it is driving, will be at the heart of it. Even if the biggest beneficiaries are Apple's competitors.
Like a new star in an act that's gone stale, the iPhone is drawing the punters back into the tent.
It's enjoying a barnstorming year, selling more than 13 million. More than 100 million games and apps were downloaded from the iPhone Apps Store in the first two months after its July launch.
AT&T, which is now been flogging the iPhone for more than a year, is seeing some good numbers. iPhone ARPU is $95, compared with $59 from the rest of its postpaid customers. Q3 wireless data revenue rose 50.5% and churn fell to 1.2% from 1.3% the previous quarter.
AT&Ts iPhone subs came at a cost, however - a hefty $900 million in subsidies. But as it is snaring the biggest number of high-spending mobile consumers - and its competitors are not - analysts say it's worth it over the next several years.
Which is not to say the iPhone doesn't have serious flaws. For all its sexy design and multimedia integration, it has limited utility as a business tool. It has a clunky soft keyboard, and users wanting productivity apps will need to pay $100 a year to join the MobileMe cloud.
But what makes it attractive is Apple's broad ecosystem that includes the iPod, iPhone, iTunes and now the apps store. The hundreds of apps already written for the device add a clear new dimension to the mobile business - even if operators aren't benefiting.
Apple's own narrow business model in fact opens doors for its rivals.
In true Apple fashion, the company vets every iPhone app, with some waiting months for approval. Any that are considered competitive to say, iTunes or MobileMe, or that Steve just doesn't like, will be rejected.
In true Apple style it also takes a nice bite out of the sale price - 30%. Which makes Apple, as ever, an appalling company to partner with.