Mobile phone prices to plunge in 2007

The prices of mobile phones will drop sharply over the coming years with $20 handsets available to consumers as early as 2007, chip companies, quoted by Reuters, said.


The Reuters report also said mobile phones may even be produced as cheaply as $10, but the major phone vendors seem reluctant to do so because they will have to use cheap parts and the lower quality may hurt their brand image.


'Low quality is not an option, but accepting fewer features is,' Horst Pratsch, VP at German chip maker Infineon, in the report, said.


Low-cost handsets have been a major driver of the cell phone market in 2005, with vendors such as Motorola selling models for less than $50 to consumers in emerging markets who could previously not afford to buy a phone, the Reuters report said.


The Reuters report said Infineon, and rivals such as Philips from the Netherlands, are striving to integrate the key functions of a mobile phone into a single chip of around $5. -Reuters