The telecom and the IT-industry are converging, which creates new possibilities and threats for both existing mobile handset vendors and new entrants originating from the IT-industry. The purpose of this thesis is to explain how IT-players’ entrance in the mobile handset industry affects the industry in regards of key success factors and value chain structure. This study has used dynamic theories to describe the mobile handset industry. The theories have helped us in understanding the characteristics and drivers of the industry and thereafter to identify the key success factors. The empirical material is mainly collected from the Internet and interviews. The possibilities for IT-players to affect the mobile handset industry have been identified. Although the IT-players lack some KSF, they should be considered a threat in the future. We have concluded that value seems to be migrating from the mobile handset provisioning to services and applications, granting further possibilities for IT-players.