3GSM World Congress wrap-up (2) N52

With mobile penetration is already almost flat in developed countries, recent growth pattern will only be sustained in the future if mobile offerings can match low income household revenues in developing countries. The GSM Association (GSMA), aware of the situation, has launched a working group (made of mobile operators in some emerging countries) to specify an `Ultra-Low Cost` device. Once specifications were issued, it launched a special procurement process. 18 vendors were pre-selected, but Motorola was chosen. Motorola has committed to deliver 2m units (on a total of 6m) from 2Q05 onwards at a price below $40 and probably under $30 in 2006. The initial unit volume is 6m devices in 6 months. Next step will be extension to more emerging countries, and in this way to create a real mass market addressing regions where worldwide mobile coverage is in the range of 80%, but penetration is as low as 25%.

The target is a potential market of 3.3bn new mobile users, or adding 150m new subscribers per year.

Such a move will help consolidate the handset market, and most of ailing manufacturers will not be able to survive in this context.

The evolution in hardware is partly due to advances in chipsets. Having a look at recent chipmaker announcements can give confidence in the future. First, Sony, IBM and Toshiba unveiled a new groundbreaking chip called Cell. Cell fits into the converged trend and brings together Ethernet and wireless LAN capabilities. Texas Instruments announced an EDGE chip, and announced a new wireless multistandard platform OMAP-Vox. Nvidia introduced its latest wireless media processor GoForce 3D 4800 and focus on the video market. STMicroelectronics introduced a single-chip camera module, and demoed its ST's Nomadik STn8800 application processor running Linux, secure mobile phone payment, DRM and electronic signatures. NEC and TTPcom are working dual-mode chips for 2G and 3G technologies.