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Entry-level mobiles hit $30

Handset makers drive down handset costs

Handset makers continue to drive down the cost of CDMA (Code Division Multiple Access) handsets, making them more affordable to customers in developing markets, such as India and China.

Leading the charge to cheaper CDMA 2000-1X handsets is South Korea's Rose Telecom. "Rose Telecom has been shipping to Reliance in India right at $30 with a colour screen," said James Person, the chief operating officer of the CDMA Development Group, an industry group that promotes CDMA technology.

That price represents a drop from last year, when the cheapest CDMA handsets went for about $40, he said.

In addition to Rose, other handset makers are also offering low-cost CDMA 2000-1X handsets. For example, LG Electronics, Huawei Technologies and ZTE now offer handsets that are priced under $40, Person said, noting these handsets generally offer the most basic features and do not include built-in cameras, music players or external memory.

These handsets are designed for customers in developing markets, including Asia, Africa and Eastern Europe, Person said.

Prices for CDMA2000 EV-DO (Evolution Data Optimized) handsets, which offer faster data transmission speeds, remain higher than CDMA2000-1X handsets, at around $100 for the cheapest models, Person said. "It's a very different market segment," he said, noting most EV-DO subscribers are in developed countries, such as South Korea and the US.

Most of the growth potential, in terms of new subscribers, lies in the developing markets, where penetration levels are far lower than developed countries. "There's a lot of room for growth," Person said.

CDG is not the only industry group that hopes cheaper handsets can help spur subscriber growth in emerging countries. The GSM Alliance (GSMA), an industry group that backs the rival GSM (Global System for Mobile Communication) family of mobile technologies, has launched programs to produce low-cost handsets for both GSM and W-CDMA (Wideband Code Division Multiple Access, a 3G technology.


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