Only a very smart phone maker can survive in today's fickle market

A few years ago people used their mobile phones to make calls and, if they were feeling adventurous, to send the odd text. Not any more. These days we take for granted the mini-PCs in our pockets that can play our favourite songs and TV shows; they can even help you find yourself (if you get lost).

Consumers are hooked on their phones and, surveys say, miss them long before realising their wallet has gone astray. They have become a life and death matter for manufacturers too – as Nokia, BlackBerry's Canadian owner Research in Motion and now Taiwan's HTC have found to their cost. The wrong smartphone, marketed in the wrong way, can destroy a company's market value in a matter of months.

When Stephen Elop took over as chief executive of Nokia in 2010, the Finnish company was the world's largest maker of smartphones, with a global market share comfortably over 30%. A year later, and that share had halved, according to research firm IDC. In the ensuing nine months, the same thing would happen again and Nokia's share now stands at 7%. Asset sales, factory closures and job losses in their tens of thousands have followed.

The decline has been just as startling at the once-mighty BlackBerry. Having created the ultimate email machine, RIM has been unable to follow up with a phone that lets you surf the internet without making you feel suicidal, and is now facing an existential crisis. In the space of a year, the company has gone from a quarterly profit measured in the hundreds of millions of dollars to a quarterly loss of the same magnitude; 7,000 jobs have already been axed this year.

It seems a company can go out of fashion faster than its phone – as the experience of Taiwanese prodigy HTC, which has unravelled in just six months – has shown us. A relative newcomer to the consumer electronics business, it first found success making white-label Windows phones for various mobile networks. Then along came Google and the Android platform and HTC jumped aboard, making phones under its own name.

Android's magic carpet whisked HTC into the stratosphere. Revenues doubled, peaking at Christmas 2011. Then, all of a sudden, the rug was pulled out from under its feet. HTC's newest handset, the HTC One X, failed to make an impression this spring and now sales and profits are in freefall: a company that was worth more than £11bn in March is now valued at just over £4bn.

In an attempt to right the ship, HTC has sold back its stake in Dr Dre's hip headphone business after the combination of its phones and Dre's "cans" failed to inject street cred into the brand. The Seoul and Brazil offices have been closed, as has its research centre in North Carolina.

HTC is still profitable, and may well bounce back. But history suggests that once they find themselves in a tailspin, phone makers rarely recover. Siemens, once a top-five manufacturer, began to loose its appeal in 2001. In two years its market share halved. By 2005 it had halved again, and the handset division was sold to a Chinese company.

The decline of Motorola, once world number one, can be dated from 2007, the year the iPhone arrived. It took 18 months for half of Motorola's sales to fall away, and another 18 for it to loose its mojo altogether. The handset business was sold to Google last year.

If anything, the pace of decline is increasing. Apple turned the mobile phone into a status symbol on a par with the designer handbag. As customers moved upmarket, two premium brands, Apple itself and Samsung, have taken control of more than half of worldwide sales. Mobile phones, like fashion, are looking like a dangerously fickle business.