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News >> Technology >>
TI chief says demand strong, adds caution
By agencies
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Wednesday, 10 August 2005, 19:30 IST
BANGALORE: The chairman of Texas Instruments Inc (TI) the world's largest maker of microchips used in mobile phones, said that industry demand was strong but cautioned on blips from inventory sales.
"Fundamentally, the electronics market looks pretty healthy for the near future," Thomas Engibous said. "I only say we have to be careful with inventory sales. Sometimes in the short run we see small cycles in this."
Engibous, who was in India's technology capital a day after demonstrating a new "single phone chip" aimed at slashing GSM handset costs in Delhi, said the chip that substitutes for several in current phones was a key step to drive volumes.
"It is going to enable a whole new class of people that could possibly afford a cellphone, which could not afford it in the past," he said.
"It is likely that the largest market for the single phone chip would be China."
India is the next hottest market for phone services.
The GSM-standard-based cellphone industry is aiming to offer handsets that cost below $40, aiming to potentially add 100 million customers worldwide a year, the firm said in a statement. Cheap GSM handsets currently cost about 30 percent more in India.
Last month, Texas Instruments, which competes with Motorola, beat analysts estimates on earnings, helped by demand for chips for video and Internet phones.
More than 50 percent of the world's cell phones use Texas Instruments' chips, and in three or four years, a majority of them would be powered by single-phone chips, Engibous said.
In Delhi, Engibous announced that two Indian companies would make handsets using the single-chip technology, and the first of these would hit the market by September.
Engibous said India's average service spending was low, which made it difficult for telecoms operators to bundle handset costs into service bills. Cheaper handsets are expected to rope in new customers in such a market.
Texax Instruments was a pioneer in developing India as a global hub for software development 20 years ago. It currently has 1,300 engineers in its Bangalore center, which played a major role in developing the single-phone chip, company officials said.