"Right now, 77 percent of the world’s population lives within range of a mobile phone network, but only 25 percent of the world’s population subscribes to a mobile phone service (Sources: World Bank and EMC). All around the world operators have the infrastructure in place for mobile services, but the relatively high cost of mobile phones is holding back potential subscribers," said Thierry Laurent, executive vice president of business development, communications businesses, Philips Semiconductors.
Philips has pioneered the system solution approach, with one in seven GSM handsets built on the platform. The scalability and flexibility of its Nexperia system solutions is at the heart of enabling Philips to deliver its low-cost solution, which can easily be integrated into mobile handsets by its customers.
The first product from the project will be a sub-$5 system solution - a GSM device capable of making calls and sending SMS messages. It will have a black & white screen and will be able to play polyphonic ringtones.
By bringing to market a sub-$5 system solution, with all the hardware, software and peripherals necessary for building mobile phones, Philips is enabling its ODM, OEM and operator customers to dramatically reduce costs and bring sub-$20 handsets to the consumer.
Speaking at the Ultra Low-Cost Handset Conference (Amsterdam, 28-29 June) Laurent said that the initiative would be based at Philips' facility in Shanghai, and that it would seek to drive down total handset costs for this market segment below $15 by 2008.
Currently, the lowest cost mobile phones on the market are just below $40.
While these ultra-low handsets lack i-mode and other mobile internet functionality, the advancements in core systems they bring, especially from the Chinese research and development, will put pressure on all handset prices and bring them all down in parallel.