The Sub-$50 phone

Despite a lot of attention being paid to high end smart phones and 3G handsets, the next big thing in wireless could be cheap sub-$50 phones. If you look at the wireless markets worldwide, you can easily see that big wireless growth is coming from markets like India, China, Brazil and parts of Africa. In these countries, cellular services so far have been favored by consumers in the upper end of the economic spectrum, folks who can afford $200 phones.

The next phase of growth is going to be driven by the mass market which is looking for cheap and affordable phones to complement low-cost calling plans. This will be a growth market up until 2009, when the global market for entry-level mobile phones will begin to approach saturation, according to new data from ABI Research. This presents an opportunity for some handset makers who are all set to churn out sub-$50 phones.

Hop-On is a good example. At CTIA next week, it is going to introduce a $36 handset. Expect more such phone makers, especially from China to pop-up. Texas Instruments and Nokia are working on combo-chips which fit well with the sub $50 phone. Analysts predict that the cost of the phone would inch down to $20 a handset, ushering in an era of disposable phone. Qualcomm is also working on integrated and affordable CDMA chipsets to bring the prices of the phones down.