NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, June 6, 2005

Within two years, and possibly within 12 months, the wireless handset industry is on track to design and manufacture low-end cellular handsets that cost US$25 or less to make, according to results of a recent survey conducted by Portelligent among the company’s customers in the wireless and electronics industries.

Among respondents to the survey, 80% reported a belief that a low-end GSM handset with a total bill-of-materials cost of US$25 can be achieved within two years or less, while 51% believe this level can be reached within one year or less. In addition to electronic and mechanical components, the cost of the handset as presented in the survey was defined to include battery, testing, final assembly, software and IP licensing, and product packaging.

“We have believed for some time, based on the trends in product design and component cost which we see in our product teardown analyses, that very low-cost cellular handsets will emerge in the next several years,” comments David Carey, president of Portelligent. “We think this survey is significant in that it shows that a substantial majority of our customers seem to agree on the near-term reality of the $25 handset, as they represent diverse points of view within the electronics industry, including semiconductor and device makers, handset makers, and wireless service providers. With the handset industry reaching maturity throughout the developed world, more economic cellular phone designs will be a key factor in securing ’the Next Billion’ wireless subscribers.”
Story found here.