Cell phone chip makers with new strategy to up sales

By SiliconIndia   |   Wednesday, 26 March 2008, 13:45 Hrs
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Bangalore: Mobile handset chip makers such as NXP Semiconductors and Texas Instruments (TI) are trying a unique strategy to market their cell phone chips. They are planning to educate service providers like Bharti Airtel, Vodafone Essar, Reliance Communications, Tata Teleservices and handset vendors such as Nokia Oyj, Motorola, Samsung Electronics and LG Electronics about the benefits of using their chipset solutions, reported livemint.com.

In the next three months, at least two start-up Indian mobile phone vendors will be launching self-branded phones based on chips designed by NXP Semiconductors India, the Indian unit of NXP Semiconductors Netherlands BV, formerly Philips Semiconductors.

"We are having advanced discussions with three Indian mobile operators and four local brands that have shown interest in launching mobile phones based on our chipset solutions," says Ashok Chandak, director (global sales) at NXP. If the deal gets through, one of the operators would launch its own branded phones while the other two were likely to offer bundled offers on NXP based entry-level phones (priced below Rs2,000) by September.

At least three reference platforms from NXP have been selected by the two local phone vendors, which will launch "made for India" smart phones and entry-level phones before June. NXP did not disclose the names of these vendors.

For the $6.32 billion (Rs25,659 crore) NXP, India contributes less than 5 percent of its revenues. The country has so far been a talent base for chip companies for design and technology development. They now see a growing market for cell phones in India, where 8.77 million mobile subscribers were added in January, as per the Telecom Regulatory Authority of India.

Jithu Niruthambath, director (business development, wireless), Texas Instruments India, says the important reason for this engagement is to understand the India-specific requirements for mobile phones. Spice Mobiles, which recently announced what it claimed was the world?s first movie phone designed for DVD-quality viewing, is based on a TI chip, says Niruthambath.

Mobile phone operators, he says, expect solutions that will help them increase the Arpu or average revenue per user. "Earlier, the mobile operators were not interested in our technology road map, but now they are keen to know the impact on Arpu in choosing our chipset-based handset." Arpu can be increased by offering newer and better features based on the abilities of the chip.

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