Italians lead the bid to wrest a slice of lucrative market and expect some of the world's top models to lead the campaign. Susie Mesure reports

We've squirted the scents, worn the watches and hankered after the handbags. Now designers want to add mobile phones to the 2008 list of fashion must-haves with a series of launches to cash in on a multimillion-pound market.

Dior and Swarovski will be the latest luxury giants to unveil handsets next year, while Swiss watchmaker Tag Heuer is expected to be the first timepiece maker to release one early next summer.

Demand for the Apple iPhone, a Christmas favourite for generous gift-givers, is proof of the growing appetite for stylish handsets. Experts predict that in the next three years non-traditional brands, including fashion designers, will grab 20 per cent of the global market, selling around 200 million handsets a year.

Andrew Harrison, UK chief executive of Carphone Warehouse, said his customers were increasingly buying more than one handset, with around a fifth owning two or more. "These handsets have different uses: business, going out or even special occasions. We expect this trend to continue." he added.

So far Italian fashion houses have been the quickest to cash in on this trend, with Dolce & Gabbana, Prada and Armani all teaming up with manufacturers to design phones that scream form over function.

Despite steep initial price tags, such phones are proving popular. Prada has sold around 500,000 of its LG phone since its launch last spring, while D&G's limited edition gold MotoRAZR V3i phone for Motorola, which cost around 275, clocked up sales of $256m (128m) in 12 months, or around 465,000 phones.

And it isn't just the high-end fashion houses that have spotted the potential for phone collaborations. Ted Baker, the high street retailer, the denim brand Levi's, the Italian luggage maker Mandarina Duck and even the car company Porsche all launched handsets in time for Christmas.

Fashion and the mobile phone industry first collided two years ago when Motorola's bright pink V3 clamshell was a Christmas bestseller. Other hits since then have included Cath Kidston's designs for Nokia and Anna Sui's for Samsung. Analysts believe fashion and mobiles make perfect bedfellows because with a new product every three months, the handset industry is one of the few able to keep pace with the world of fashion.


Julien Macdonald for Sony Ericsson

The UK designer vamped up the existing K510i with a splash of exotic floral colour from his 2007 spring/summer collection

Cath Kidston for Nokia

Two handsets decorated with Cath Kidston's vintage-inspired floral prints flew out of Carphone Warehouse stores last summer

Anna Sui, Samsung

Hot on the heels of Von Furstenberg's design came one from US designer Anna Sui, complete with carrying case, phone charm, screensaver and lipgloss

Diane von Furstenberg, Samsung

The queen of wrap frocks may like another go at phone design. Her couture-tech print was not the most popular the industry has ever seen

Jasper Morrison, Samsung

Yet another tie-up from the Korean company, this time with UK designer Jasper Morrison. His sleek design was simple but effective

Armani, Agyness Deyn

Giorgio Armani showed he meant business with his phone for Samsung by getting the year's hottest model, Agyness Deyn, to appear in his ad campaign