 million personal computers.) This had and has two implications. The added value for Microsoft per PC shipped is close to $40, the added value for Microsoft in a mobile phone is $15 dollars and the market has to be shared with Apple and Android. Both are problematic. Apple has a first-mover advantage that at the time of writing appears unshakeable. Android is effectively open sourced and therefore will be likely to force down operating system realised value. Buying Nokia might be a solution but that all depends on what happens next both in terms of handset hardware and software form factor and functionality. It also depends on the market mix. If everyone bought $500 smart phones then additional software value would be realised. However, what we are trying to establish is the mix between hardware and software value going forward and who will own that value. The answer is hidden somewhere in the hardware and software changes that have happened in the last five years, the hardware and software changes that are happening today, the hardware and software changes that are likely to happen over the next five years and the impact these changes will have on the smart phone market, TV market, games market and content and entertainment sector and application added value. We just need to know where to look. The journey takes us from camera phones via gaming platforms to a future that may be uncertain but in theory at least should be predictable. The analysis needs to include successes and failures. The accuracy of the prediction is dependent on the amount of detail that we can capture and the depth of the analysis that we apply to that detail SO here we go. 9.2 Lessons from the Past At CEBIT in March 2005 Samsung launched their V770 camera phone with the stated aim of proving that a 6 midtier' digital camera phone capability could be packaged into a camera phone physical form factor. The 770 was a 7-megapixel phone with interchangeable lenses. In common with many other camera phones, it also supported basic camcorder capabil