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terça-feira, dezembro 06, 2005

Chip makers drive race to $20 cell phones

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Prices of mobile phones will drop sharply over coming years with $20 handsets available to consumers as early as 2007, chip companies said on Tuesday.

Mobile phones may even be produced as cheaply as $10, but the major phone vendors seem reluctant to do so because they will have to use cheap parts and the lower quality may hurt their brand image, said Horst Pratsch, vice president for Entry Platforms at German chip maker Infineon.

"Low quality is not an option, but accepting fewer features is," he said in a telephone interview on the fringes of an ultra low-cost handset conference in Brussels, Belgium.

Low-cost handsets have been a major driver of the cell phone market in 2005, with vendors such as Motorola selling models for less than $50 to consumers in emerging markets who previously could not afford to buy a phone.

Infineon, and rivals such as Philips from the Netherlands, are striving to integrate the key functions of a mobile phone into a single chip of around $5.

This will help phone producers assemble a complete phone with far fewer components than the 150 used now, Pratsch said.
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Analysts estimate some 810 million mobile phones will be sold to consumers this year, up from around 680 million last year. Close to 2 billion people now carry one.

"There are around 3.5 billion people living in areas with mobile phone coverage who cannot afford their own handset," said Ameet Shah, strategy chief for emerging markets handsets at the GSM Association which represents the world's mobile carriers.

Phone vendors can drive down costs by using weaker batteries, lower-grade plastics and stripped-down software, similar to cordless phones for the home. But the big vendors are hesitant to do so, because they fear that unhappy customers will switch brands when replace their first phone, Pratsch said.
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[print version] Chip makers drive race to $20 cell phones | CNET News.com

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