The Hindu Business Line : Chipset makers join local cos for cheaper mobiles

Low cost story
Apart from NXP, companies like TI, Qualcomm and Infineon are also adopting the strategy to enable local companies manufacture low cost handsets.
Partnerships with smaller companies are aimed at developing feature-packed cell phones at low price points.

Thomas K. Thomas

New Delhi, April 5 In a bid to drive down mobile handset price to under $20 (approximately Rs 800), chipset manufacturers are now partnering with companies other than the top 5 vendors.

NXP Semiconductors, for instance, has partnered with Chinese design house Wingtech, to jointly scout for an Indian manufacturer to roll out low cost mobile handsets specifically targeted at this market. Other chip set manufacturers such as Texas Instruments (TI), Qualcomm and Infineon are also adopting this strategy to enable local companies manufacture low cost handsets. While chipsets developed by TI is being used by BPL, Qualcomm is hunting for a local partner to manufacture CDMA handsets in the country.

Though chip makers including NXP and TI have also partnered with the large handset manufacturers such as Nokia and Sony Ericsson, agreements with local brand owners in India and China enable the semi conductor firms to play a greater role in the pricing and designing of the product.

“Larger vendors have a huge product portfolio and may find it difficult to focus on a particular segment of mobile users. However, local companies are able to design phones suited to local needs. Big handset vendors will sell the same handset in Delhi and in a village,” said Mr Zhang, Vice-Chairman and CEO of Wingtech.

A recent study by the Yankee Group revealed that market leader Nokia’s contribution to sub-$50 GSM handset volumes was only 22 per cent in October 2007. Mr Aravind Pai of NXP said that while larger vendors will continue to be the dominant players in the overall handset market, partnerships with smaller companies are aimed at developing feature-packed cell phones at low price points.

NXP has signed ‘a go to market agreement’ with Wingtech wherein the two companies will design chipset solutions and develop the applications and software based on local needs. With operators beginning to roll out cellular services in rural and semi urban areas, low cost handsets will drive India’s mobile growth story.

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