I don't see people watching TV on such a small screen. What they are doing is downloading videos and music, and I see manufacturers concentrating on improving music and video quality over the next few years.
In the medium and higher end you need a combination because you can have best image and design but if the phones don't have the technology, you're not going to sell them.
When targeting the lower end segment you look for where you can control costs. You can easily work with design and provide basic functionality.
I agree that MP3 is going to be the top attraction this year and to a lesser extent the ability to send videos.
