Chipmakers predict sharp drop of mobile phones prices

Chipmakers have stated that the availability of mobile phones at prices of about $20, will be possible in the next two years. Chip-making companies, such as Infineon and Philips, are working on single chip of about $5, which will integrate the main functions of a mobile handset, thus allowing producers to assemble a complete phone with much fewer components than the 150 used now. This is provoked by the fact that low-cost devices have been a major driver of the cell phone market in 2005, especially emerging ones. The vice president of Infineon, Horst Pratsch unveiled that in the first half of 2006 Infineon will launch a low-cost phone platform with less than 100 components for handsets that will cost less than $20 to produce (now they cost $35). In the year 2007 the company plans to offer 50 components platform, which will cause the production price to drop even further. Philips also expects to be able to supply vendors with a design that will allow a handset production below $15.

Source: News.com