The ultralow-cost (ULC) handset market is seeing high levels of interest from all industry players. The market anticipates over 80 million new wireless subscribers year-on-year in China until 2012, while India - having a user-base of 275 million - has one of the lowest teledensities in the world, with less than 25 percent.
These markets offer huge potential for handset manufacturers as the developed markets slowly reach saturation point. The GSM Association has predicted that several hundred million ULC models will ship by 2010, with over two-thirds of new cellular users expected in the next three years to be from the developing world.
With this backdrop, the interest in the ULC market is understandable. The key to success will lie in the correct targeting of application and user trends.
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| Figure 1. Combining GSM and VoIP technology in a low-cost mobile platform will increase coverage and decrease cost per call. |
The low-cost and BRIC (Brazil, Russia, India and China) markets have been driven by a focused and dedicated strategy of onchip integration as a means of achieving a price-performance position needed in a market with sub-$40 average selling price.
The evolution of the sector is being driven by the aggressive integration strategy of chip suppliers. Baseband, power management unit, RF transceiver and FM radio are now combined on a single-chip. This evolution has provided the ULC segment with affordable phones with a targeted multimedia feature-set.
In the BRIC target markets, users belong to one of three groups: low-income users in urban/rural areas; people who don't need the extended functions of mobile phones; and financially dependent people.
Applications
From citizen journalism, listening to podcasts and music, Internet browsing to voice and text messaging functions, ULC phones open up huge potential for application diversity and usage in the developing and emerging markets.
Edge devices have enhanced the mobile Internet experience. They have been catalysts for the usability and acceptance of Web 2.0 and Web-based applications.
These include location and navigation, and YouTube. Cameras and file sharing present ever increasing content and user dynamics for social networking sites and blogging. The true success of mobile Internet no longer depends on "enabler" technology, but on how the operators position and define their data-planning and subscriber cost structures.
Meanwhile, free connectivity such as Bluetooth will continue to dominate for file sharing. However, the increasing attractiveness of the ULC market may see changes happen over time.
Java phones make high-end content affordable at ULC prices to an increasingly hungry market. At the same time, more free content is being made available to users as a means of stimulating subscriber behavior.
An example is China Mobile's 12530 music site. FM radio, podcasts and MP3s have succeeded in offering large amounts of free content such as news, music, entertainment and educational information.
In the meantime, there is strong demand for even the simplest handsets and an increasing demand for network infrastructure coverage. Chip suppliers have been able to drive down component costs, and handset makers are stripping down software and specifications, retaining only essential functions to keep prices low.
With these trends in mind, Infineon developed products for bringing feature phones into the ULC market.
