Chip makers drive race to $20 cellphones by 2007

Iria · Dec 6, 2005, 09:45 PM

AMSTERDAM (Reuters) - 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.

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 could previously 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.
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Read More / Source: Reuters

Dec 6, 2005, 09:45 PM	#1
Iria DriverHeaven Extreme Member Join Date: Apr 2004 Posts: 7,275 Rep Power: 87	Chip makers drive race to $20 cellphones by 2007 AMSTERDAM (Reuters) - 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. 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 could previously 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. ___________ Read More / Source: Reuters