Is a US$20 cell phone on the horizon?

Texas Instruments is touting the cost benefits of a chip that it says combines all the crucial functions of a mobile phone.

NEW DELHI, India--Texas Instruments has announced the availability of its single-chip technology for cell phone makers in emerging markets.

The company that the product, made available Tuesday, combines functions such as memory, logic, power management, radio and network processes on a single chip. The chip has been developed using the company's 90-nanometer CMOS (complementary metal oxide semiconductor) manufacturing and digital radio-frequency processor technologies, the chipmaker said.

This integration of crucial electronics on a single chip will reduce the power requirements, the needed board area and silicon area of phones. All of that should help drive down costs of entry-level GSM (Global System for Mobile Communications) phones with GPRS (General Packet Radio Service) capability, Texas Instruments said. The chip was made available to Nokia at the beginning of the year and is now available to manufacturers in India and other emerging markets.

"It will reduce (the) electronics bill of material for handset vendors by 30 percent," Tom Engibous, chairman of Texas Instruments, said here while addressing members of the Cellular Operators Association of India. With this, he said, there is the possibility of US$20 cell phones on the horizon. "Our customers can use this technology to make ultra-low-cost handsets affordable in largely untapped consumer markets such as India, China, South America, Eastern Europe and other emerging markets."

Emerging markets are a target of chipmakers, as well as handset makers. Qualcomm, for example, is also working on chips that combine several functions of CDMA (code division multiple access) cell phones and help handset makers reduce costs.

India is among the fastest-growing cell phone markets in the world. The country expects to add more than 100 million new subscribers in the next two years, from the present base of 58 million. Industry leaders assert that although call charges in India are the cheapest in the world, high regulatory fees and the lack of cheaper entry-level phones are key factors affecting growth.

Engibous said the bulk of the designing, development and testing for the new chipset took place at Texas Instruments' Bangalore development center, which has 1,200 engineers. The facility, one of the oldest foreign development centers in India, marked its 20th anniversary this month.

The semiconductor maker also announced what it said are the first cell phones built in India--from concept to design to production--featuring Texas Instruments' TCS chipset family and a single-chip Bluetooth module. These phones have been developed by Indian companies BPL and Quasar. While BPL will target the local market, Quasar has developed the phone for Primus. The phones are expected to be available by year-end.