InterDigital Inc (IDCC)

[blueskywaves]

2) It is logical to assume that by 2007 the vast majority of infrastructure and handsets being sold will have 3G functionality. Some will be 3G-only; some will be dual mode (i.e. 3G and 2G capable). In addition, by 2007 the cost of the 2G functionality in a 3G-capable device will be minimal (i.e. the majority of the cost will be due to 3G functionality). These types of products will be covered under a 3G license; not the 2G license that was just signed.

Good point, Ed. Below are some examples of the kind of products that will be common later in the decade. Note the price points of these cutting edge products. Then assume typical annual cost of good declines as these products make their way into the mainstream of a global wireless market that will probably have an installed base of anywhere from 1.5B to 2.0B during the second half of this decade.

The most optimistic case for 3G is that the persistent overcapacity in the semiconductor industry will drive costs so low that it will be much cheaper for a carrier to move from 2G to 3G than to upgrade from 2G to 2.5G.

Compact silicon drives color phones

The Sony-Ericsson T68 mobile phone exemplifies the kind of feature-rich, high-margin handset the wireless industry is banking on for future profits. Its hardware design reflects the trend toward more compact, powerful silicon.

The T68 packs an impressive feature set into a compact 84-gram package. With a color LCD, triband "world phone" GSM support, General Packet Radio Service data capability, and an IrDA-plus-Bluetooth interface for cable-free connectivity to other gadgetry, the T68 represents a new class of mobile phones fighting the commoditization tide........

...........By our estimates, Bluetooth and the color display add $30 to $40 to the typical $80 GSM handset hardware cost-of-goods sold, for a $120 (or so) total phone manufacturing cost. With retail for the T68 well north of $400, the profit potential of feature-infused handsets seems clear. Whether users upgrade will depend on technology advancements, carrier service offerings and economics.

http://www.eet.com/sys/uth/OEG20020514S0031

Danger's Hiptop: 'Arm'ed and dangerous

Danger Inc.'s Hiptop device takes a shot at an emerging youth market for integrated wireless data and voice capabilities, using a unique system form factor. Based on the GSM/GPRS standard, the Hiptop acts as a cell phone, modified Web browser, e-mail client and personal information manager.....

.........The estimated cost of goods sold for the Hiptop is well below $150, suggesting a small net profit given a $200 post-rebate hardware price via T-Mobile. But it remains to be seen whether a device like the Sidekick-aimed at a youth market but service-priced for adults-hits its target.

http://www.eet.com/sys/uth/OEG20030224S0038

Motorola's Bluetooth headset: Headlong into hands-free

Cost-of-goods-sold for the headset was judged to be around $30, well under the $199 retail price. Advances in integration demonstrated with the design (and resulting low cost) imply that inexpensive Bluetooth accessories are at hand, particularly once early premium margins erode. Key Bluetooth connectivity components were around $10 by our estimates, demonstrating that the $5 "promised land" for embedded Bluetooth solutions is within striking distance.

http://www.eet.com/sys/uth/OEG20020806S0018

Mitsubishi's D-2101V 3G Handset: Too Much, Too Early?

The silicon-rich Mitsubishi D-2101V wideband-CDMA phone suggests that the complexity-and therefore cost-of W-CDMA handsets will make it tough to achieve high-volume sales anytime soon. With 43 ICs, a total semiconductor die area of 14.6 cm2, 39 modules or odd-form components and more than 775 discrete components, the D-2101V is two to 10 times more complex than entry-level GSM phones. Correspondingly, cost-of-goods-sold estimates for the D-2101V exceed $250-well beyond both GSM and cdma2000 handset counterparts.

http://www.eet.com/sys/uth/OEG20021223S0017

T-Mobile's PocketPC Phone Edition: Are We There Yet?

Sold outside the United States as the XDA and manufactured by Taiwanese OEM High Tech Computer (HTC), the Phone Edition can rightfully claim tight integration of phone and PDA form and function. GSM voice calls, SMS short-message service, wireless e-mail and desktop-like Web browsing are supported along with all traditional synchronizing PDA features. Product size is similar to that of traditional phoneless PDAs, the result of a single-board construction snugly layered between the front-lit touchscreen LCD and 4-mm-thick planar lithium-ion battery.

http://www.eet.com/sys/uth/OEG20020905S0021

Palm's latest wireless wonder

Our estimated cost-of-goods-sold for the i705 was below $100, less than 25 percent of the $449 retail price. Expect snappy price reductions and/or feature enhancements, since current i705 gross margins appear healthy. Color LCDs would be a sensible addition to provide a more compelling wireless Web-browsing experience-even in the "clipped" format mandated for the i705. Voice capability mirroring the competing Handspring Treo and RIM Blackberry 5810 should also be on the short list.

Meanwhile, our experience with the wireless connectivity proved disappointing, despite our being squarely within the advertised Palm.net/Mobitex coverage area.

Component advancements in the i705 point to a bright future for cost-effective, low-complexity data and voice radios, but the supporting infrastructure and services must improve to make good on that promise.

http://www.eet.com/sys/uth/OEG20020415S0030