Wireless handset prices likely to fall further
Mobile phone prices are expected to drop further this year.
According to industry sources, the fall in prices of core chips in handsets and lowered production costs will drive down the price of handsets this year.
The price of two core chips, MSM (mobile station modem) and BBA (baseband analog processor), have been declining steadily since last year. Qualcomm, the chip manufacturer, succeeded in revamping the manufacturing process which, in turn, led to lower production costs. The two chips alone account for over 15 percent of the cost of a wireless handset.
The price of an MSM-2310 chip, which sold at about $20 a unit in the first half of last year, dropped to below $15 recently.
MSM-3000 chip, which came into use in the latter of half of last year, also dropped to about $18 from the initial $22. BBA chips fell from $8 a unit to around $6.
The industry expects to see further reductions in the price of existing chips when Qualcomm introduces MSM-3200 chips sometime in the first half of the year.
With manufacturers planning to boost their production this year, a significant reduction in production costs can also be expected.
Domestic wireless handset manufacturers expect to export more than 25 million units this year with the huge growth of the global market for CDMA (code division multiple access) handsets.
"The lower chip prices and production costs will lead to cheaper wireless handsets this year," said an LG Information and Communications official, adding that the price of low-end handsets are expected to go down by a significant margin.
Updated: 01/15/2000 |
