In-Stat: 3G, Other Market Trends Challenge Handset Component Makers

In-Stat has issued a report that finds "wireless handset component makers are scrambling to support some challenging market trends including the proliferation of 3G services."

Allen Nogee at In-Stat said, "3G networks have made 2005 an exciting time for subscribers and a trying time for handset and component makers. Carriers have spent billions to get their data networks off the ground; they have become desperate to start getting some payback."

Key findings of the report include:

• Price pressures are accelerating. GSM handsets have hit the $30 level, and the push is on for $20. WCDMA handsets, most of which also support GSM, remain expensive, but prices are dropping fast.
• Chip counts are dropping. Although both Intel and TI have long talked about their visions for a “one-chip” handset, now all chipmakers see the need to get handset chip counts down as fast as possible, especially for low-end handsets.
• Memory is growing greatly. Handsets are being made with larger and larger sections of flash memory, and some handsets have removable memory cards. Cellular carriers realize that subscribers won’t buy songs and applications if they have no place to store them on their handsets.