When first cell phones came around, almost everybody I know had a Nokia. They were working for years and they had a nice interface. You could do everything with excactly four function buttons: Menu (also Yes, Receive and Hang up call), Cancel, Up and Down. Simple and smart, as less is more.
Nokia is still cool in Europe, but they are having difficulties penetrating the US and were forced to leave the Japanese market. And there is another star rising, and it's called the iPhone. Apple was able to take 1% of global mobile market share with just one high end model. The first generation did not make it to Japan, but they were able to do that too with the second 3G model.
Apple made quite an interesting strategy, as they gave the iPhone the thing they do best - awesome software. Ok, first generations did miss a few basic features, but the usability was and still is superior. All other phones's software feels the same, but iPhone OS feels better. And it uses only one button.
If you look at an ordinary Nokia phone today, it has about ten function buttons: Menu, Function one, Function two, Receive, Hang up, Left, Right, Up, Down, OK. That can be confusing and a lot of people end up not using all of them. Luckily Nokia was able to understand this and started going back to basics.
After their acquisition of Symbian, it looks like things will turn out for the better. The N series looks good and the N97 looks amazing. Other companies were finally able to notice that mobile phones should be fun to use.
There are other players, like Samsung, RIM and Google, who are following the little revolution the iPhone made. iPhone may not be perfect and the best, but one thing is certain. Apple showed us that software and user experience do matter, and they matter a lot.