Motorola to team with Texas Instruments on 3G

Handset maker Motorola would develop advanced mobile phones using chips from Texas Instruments (TI), a Reuters report said.

The Reuters report said Motorola would use customized chips from TI for upcoming 3G handsets that would be available as early as 2008.

The report quoted analysts as saying that the deal would boost revenue at TI, which already sells Motorola chips for cheaper handsets but recently blamed its poor quarterly results on weak demand for more-costly phones that use multiple TI chips.

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"We view this announcement as highly significant given (Motorola's) size, market share momentum and potential TI dollar content per phone," Stifel Nicolaus analyst Cody Acree, was quoted as saying.. \n

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Acree estimated that TI could sell as much as $25 worth of chips to Motorola per phone. Forward Concepts analyst Will Strauss estimated that under the new agreement, TI's revenue per phone could be at least $30 per phone, the Reuters report said. \n

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Motorola said TI would also supply chips for handsets based on WiMax, an emerging high-speed wireless technology, and these handsets would also be available in 2008. \n

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Motorola, which had mostly used chips from Freescale Semiconductor, has been adding new suppliers including Qualcomm as well as TI, the report said. \n

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Strauss said more suppliers help to drive down costs at Motorola, which saw its profits halve in the third quarter as it was hurt by phone price discounts, the report added. \n

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Nokia , Motorola's main handset rival, is TI's biggest cell phone chip customer. TI's second-biggest chip customer is Ericsson, Strauss said. \n

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'We view this announcement as highly significant given (Motorola's) size, market share momentum and potential TI dollar content per phone,' Stifel Nicolaus analyst Cody Acree, was quoted as saying..

Acree estimated that TI could sell as much as $25 worth of chips to Motorola per phone. Forward Concepts analyst Will Strauss estimated that under the new agreement, TI's revenue per phone could be at least $30 per phone, the Reuters report said.

Motorola said TI would also supply chips for handsets based on WiMax, an emerging high-speed wireless technology, and these handsets would also be available in 2008.

Motorola, which had mostly used chips from Freescale Semiconductor, has been adding new suppliers including Qualcomm as well as TI, the report said.

Strauss said more suppliers help to drive down costs at Motorola, which saw its profits halve in the third quarter as it was hurt by phone price discounts, the report added.

Nokia , Motorola's main handset rival, is TI's biggest cell phone chip customer. TI's second-biggest chip customer is Ericsson, Strauss said.

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