A couple of weeks ago we heard the CFOs of Texas Instruments and STMicroelectronics bemoan the trend of demand going towards the low-end mobile phone rather than the high-end, however other leading lights in the industry welcome the move.
CFOs don’t like that trend because the silicon going into a high-end phone is larger, more complex, and priced higher, than the silicon going into low-end phones.
This week other industry figures have welcomed the trend to the low-end.
“The move to cheaper handsets has helped drive volume”, says ARM’s CEO Warren East, “typically the cheaper handsets only have one ARM, not several, and it tends to be low-priced, and so the royalty rate is less, but the volume is more. Typically a low-cost handset is sold in the developing world to a new subscriber who may replace it later on with a new and better phone.”
Over at TI, the head of wireless products, Gille Delfassy, reckons: “A lot of the demand is for the low-end more voice-centric phones. I think it’s a good thing because we are the dominant supplier of low-end phones. That is how we are seeding the market. People will upgrade from the low-end and move upwards to sleeker, more feature-rich, phones. I’ll never be unhappy about the growth of low-end phones.”
One surprise this week is that the phone winning an international competition for inexpensive 3G phones was an LG model costing $100. Hardly inexpensive, I would venture.
“I agree with you, it’s expensive” says Delfassy, “I guess one of the reasons is that a 3G phone wants a nice display, and the peripherals cost a lot. We’ve got the price of a finished phone down to $20 by getting it down to a single chip. We’re very proud of doing that. We’re changing the way the world works.”
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