Qualcomm sees $50 3G phones

Company's COO says European and Japanese version of 3G is "really coming down in price" and could reach $50 within two years. Photos: Mobile phones convene in Cannes

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Qualcomm, the U.S.-based wireless tech company, expects $50 handsets for faster third-generation networks to be on the market in two years.

The European and Japanese version of 3G--known as Wideband CDMA (code division multiple access)--is "really coming down in price. The low tier is a year or two away before you really get to the $50 phone type," Qualcomm's Chief Operating Officer Tony Thornley said in an interview Tuesday.

These phones would be powered by $10 to $15 chipsets that Qualcomm has on its production road map.

"It's the operators' choice how aggressively they want to go the low end," Thornley said on the sidelines of the 3GSM mobile trade show in Cannes, France. Phones for Wideband CDMA currently cost several hundreds of dollars.

Qualcomm is the dominant supplier of CDMA chips designed for mobile phone networks used in the Americas and parts of Asia. Around one-third of the world's 1.7 billion mobile phone subscribers subscribe to a CDMA service.

Until recently, Qualcomm did not compete with producers of chips for the GSM (Global System for Mobile Communications) networks, but that is changing because the successor of GSM, Wideband CDMA, is a later version of Qualcomm's homegrown CDMA technology.

The number of Wideband CDMA subscribers is expected to grow to 70 million by the end of 2005, according to mobile phone and network vendor Nokia and others, and most of the GSM chipmakers hope to sell their first Wideband CDMA chips by then.

Meanwhile, Qualcomm and a few of its rivals such as EMP and NEC are already selling theirs.

"It's hard to catch up, if they had a way to catch up," Thornley said.

Qualcomm and U.S. rival Texas Instruments, the dominant chip supplier to GSM handset makers, have pointed out that most of their customers want a family of chips for a range of cheap to advanced phones that work with the same embedded software in order to save costs.

While smaller rivals are still scrambling to get their first Wideband CDMA chips out, Qualcomm has already tested chips for the even faster 3G flavor, called HSDPA (High-Speed Downlink Packet Access). HSDPA networks are expected to start operations by the end of the year.

Qualcomm chips were used in HSDPA tests with Alcatel and Nortel Networks in recent months.

"HSDPA is about getting the speed up and the cost down. Operators are very interested," Thornley said.