China gets sub-$100 Android phone design

SAN JOSE, Calif. – China's handset makers will be able to build sub-$100 Android phones using a new reference design created by Via Telecom and Wind River. The effort targets one of the fastest growing segments of a smartphone business in which Android is expected to rocket past the RIM Blackberry and Apple iPhone in the next few years.

The so-called Kunlun platform includes 3G EVDO Rev. A and 1xRTT modem, telephony software and printed circuit board design from Via along with the Wind River Platform for Android. OEMs should be able to sell handsets to carriers or consumers based on the components for less than $100 and still make a profit, the companies said.

The partners suggest the Kunlun phones could include features such as GPS, Wi-Fi, Bluetooth, FM radio, camera, touchpad, keyboard and microSD slots. The platform is optimized for use in China, but could be adapted for use in other markets, the companies said.

Hitting a sub-$100 cost to carriers and consumers would be a significant milestone. Today's Android phones typically sport a bill of materials (BoM) cost of about $100, said Dave Carey, who heads the teardown analysis service at UBM TechInsights, part of United Business Media, the publisher of EE Times.

"Given a typical BoM range of $90-$180 for Android stuff we've looked at recently, the idea of a $100 ASP is a leap forward," said Carey.

With expected improvements in silicon, "I can see a BoM cost below $75 coming before long, but even at a $50 BoM, a $100 selling price doesn't leave room for a lot of profit," he added.

"I've got on my desk a Chinese-made Gome Flytouch tablet running Android 2.1 that from initial inspection features at best a BoM of about $125 using a very old VIA WM8505 processor running at 350 MHz with a non-capacitive touch screen," said Allan Yogasingam, a technical marketing manager with UBM TechInsights.

Companies such as Motorola are eager to drive down costs of Android handsets to open up larger volume markets for smartphones. The low-end smartphone "is where the growth is in places like China and India," said William Stofega, program manager for mobile device research at International Data Corp. (Framingham, Mass.).

"The challenge is getting sophisticated devices into the hands of mass market consumers at prices they can afford," said Stofega. "Android is great here in that it has no license fee, but it requires lots of integration on the OEM and carrier side," something the Kunlun platform addresses, he added.

Big China OEMs such as Hua Wei and ZTE are already shipping Android smartphones. But they have yet to challenge handsets from Nokia and Samsung which dominate the China market, Stofega said/

By June 2010, quarterly shipments of Android phones hit 10.1 million units outpacing the Apple iPhone at 8.4 million units and closing in fast on second place BlackBerry at 11.2 million units, according to a September IDC report. The race will heat up, "especially as other vendors place larger bets on Android, most ostensibly Dell, Kyocera, and Samsung," it said.

IDC projects Android handsets will represent 24.6 percent of the smartphone market by 2014, second only to Symbian devices which will decline to a 32.8 percent share by that time. Asia/Pacific (excluding Japan) will take over as the leading region of smartphone sales in 2010, slightly edging out the U. S. by fewer than five million units, IDC estimates.

By 2014, total smartphone shipments worldwide will reach 526.6 million units. They will make up 31.7 percent of all mobile phones shipped that year, up from about 20 percent this year, it said.