Chinese firms are leading the way in the blossoming romance between smartphones and cars.

In the latest development, Chinese auto giant Geely has announced a move into handsets – the first carmaker anywhere to do so.

Hubei Xingji Shidai Technology, a new company founded by Geely chairman Eric Li, last week signed an agreement with the Wuhan government to establish a mobile manufacturing business in the city.

It said it is aiming for the premium smartphone market, taking advantage of Geely's expertise in "design, R&D, high-end smart manufacturing, industrial chain integration, vehicle intelligence, software development," as well as its low-orbit satellite network.

Xingji Shidai did not put any figures behind its announcement, but according to Reuters it has set aside 10 billion yuan ($1.55 billion) to invest in the business. It is aiming to ship 3 million units in its first year in 2023.

While Geely might be the only one making the journey from autos to smartphones, there is plenty of traffic in the other direction.

China's biggest smartphone-maker Xiaomi has unveiled a $10 billion car plan and tech heavyweights Tencent, Alibaba and Baidu have all made EV investments, while Huawei, with its smartphone sales receding, is building out an extensive smart car software business.

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Li pitches the investment as a strategic move and as part of his company's ambitions to be a global mobility company, combining autonomous driving, smartphones and satellites.

Mobile devices have evolved into application platforms that act as a pathway to the world of auto applications, he said.

"There is a close connection in technologies within intelligent vehicle cockpits and smartphone software technologies. The major trend in the coming future is to create user ecosystems across borders and provide users with more convenient, smarter, and seamlessly connected multi-screen experiences."

If other vehicle makers agree they haven't yet taken the plunge.

On the handset side there is as usual a good deal of attention on Apple, whose plans to tackle the auto business are an open secret.

Analyst Ming-Chi Kuo has said the first Apple vehicle is unlikely before 2025. He sees parallels between today's car market and the handset market prior to the iPhone, with a number of new technologies about to upend the market and create huge replacement demand.

The device business has little upside by contrast, with Apple soaking up most of the profits and the rest competing fiercely for market share. 5G is yet to open up new services and revenue streams.

Eric Li might have steered Geely to become one of the world's biggest carmakers, but he's fighting the traffic on this one.

— Robert Clark, contributing editor, special to Light Reading