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Motorola wins 'sub-$40' handset contract

Trade body develops third world mobile

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The guardian of the GSM mobile telephony standard, the GSM Association (GSMA), today unveiled what it called the first "sub-$40" handset, its attempt to create cheap phones for developing countries.

Between aggressively competitive mobile phone manufacturers and network handset subsidies, you wouldn't have thought the industry was well capable of creating a low-cost phone, for the developing world or otherwise, but clearly the GSMA thinks we do.

It's argument is that the sum potential customers in emerging markets can afford to pay is well below what vendors and networks are able to reduce the price of today's phones to. That's one reason why though 80 per cent of the world's population is covered by mobile phone networks, only 25 per cent of the population actually uses such services, according to the GSMA.

What's needed, it says, is an "ultra low-cost" phone. And, together with eight mobile operators - AIS Telecom, Bharti Televentures, Globe Telecom, Maxis Mobile, Orascom, SingTel Mobile, Smart Communications, Telenor Mobile and Turkcell - defined a specification for such a device. That, in turn, was submitted to 18 mobile phone makers, from which group Motorola was finally selected to make the handset, which it's calling the C114.

Some 6m handsets will ship in the first six months from their initial shipment, some time next quarter. The GSMA isn't concerned that the project will exert undue commercial benefit to Motorola - that 6m target amounts to just one per cent of the world handset market, it said.

Given the close-fought battle for market share between Motorola and Samsung, however, that single percentage point could yet be what keeps Motorola in the number two market position and Samsung in number three.

The handsets will be offered by the networks with whom the GSMA originally partnered. However, the organisation hopes to bring other, similar operators on board to help boost volumes and lower costs sufficiently to bring down the handset's cost to $30. ®

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