TAIPEI, Taiwan and BARCELONA, Spain The GSM Association said today it will use a low-cost 3G handset developed by LG Electronics in a project aimed at accelerating the adoption of 3G services worldwide.
LG competed against eight other handset providers that offered up a total of 18 phones. Word of the Korean company's winning bid began to spread last week. The phone, known as the LG-KU250/U250, is based on common specifications and criteria drafted by 12 operators for a GSMA program called "3G For All." The criteria included functionality, usability, logistics, market acceptance, target price, service and support, strategic commitment and form factor.
At a conference during 3GSM World Congress in Barcelona, GSMA CEO Rob Conway said the operators also gave the Nokia entry a "high recommendation" but would not name the other contenders in the tender.
The winning phone is powered by Qualcomm's MSM 6425 chip set whose CEO told EE Times the device will be sold at very aggressive prices "to ensure the phones are really affordable." He added the deivce has "termendous multimedia capabilities for what will be targeted as a low cost phone."
"LG is very excited about collaborating with GSMA to lead the ongoing evolution and development of 3G technology worldwide," said Skott Ahn, president and CEO of LG Electronics Mobile Communications, in a statement. "Through this partnership, we will bring all people closer to new mobile capabilities and they will benefit from higher-quality wireless multimedia 3G services. LG will provide them with attractive and feature-rich 3G devices while at the same time breaking price barriers for subscribers in the global market."
Ahn would not comment on the price of the phone, but said 'it would really depend on the level of customization. But our target is to be 30 percent lower cost than the current price for a phone that offers similar functionality."
Neither woud Ahn say how many of the KU-250 phones LG would be making in the short or medium term. The company plans to start shipping the phones to operators in May.
The LG-KU250/U250 is a candy bar style phone. It enables the regular complement of 3G multimedia services, including fast download and playback of video and audio files. The phone also includes a memory slot for expanded storage.
"A highly-capable device that is as attractive and cost-effective as the leading 2G multimedia handsets, the LG-KU250/U250 has clear mass-market appeal and will help fuel interest in third-generation services across the world," said Craig Ehrlich, chairman of the GSMA.
Ehrlich told EE Times the GSMA had given LG an endorsement for the 8 months to December 2007, but would not comment on whether another tender is being planned. "We are acting as a catalyst here for the whole industry to get behind the 3G for All initiative."
The twelve operators that selected the winning handset were Cingular Wireless, Globe Telecom, Hutchison 3G, KTF, MTN, Orange, Smart, Telecom Italian, Telefonica, Telenor, T-Mobile and Vodafone.
Not a major player in the 2G/2.5G market, LG's strategy has been to stake its claim in 3G. The company, along with rival Samsung, mainly focuses on higher end phones with fatter margins. Although this is a slight departure from that strategy, LG may be able to significantly increase its market share if all of the operators commit to selling the device.
This is the second effort by the GSMA to bring cell phones to the masses. Last year, Motorola rolled out its Motofone, the result of a similar low-cost effort launched by the GSMA.