Infineon says its platform could lead to simple phones that can be produced for $20, down from current costs of about $40. The Munich based-company joins companies such as Motorola and Philips who have started to target aggressively the 'ultra low cost' handset business.

Earlier this year, at the 3GSM World Congress, the GSM Association kick-started an effort develop mobile phones that would retail in emerging countries below $40. At the event Motorola launched the first such phone, which the group said represented the first step towards a sub $30 handset target.

Infineon says its reference platform is available now to designers and OEMs, and it expects phones based on its package could be available for volume production in the first half of 2006. The platform includes all electronic hardware and software for dual mode handsets complying with GSM900/1800 and GSM900/1900 standards.

In addition to the single chip radio/baseband, there are other RF components, power supply, memory, hardware drivers and the protocol stack, and a reference man-machine interface for simple and intuitive use of SMS and phone functions.

The entire electronics package of some 100 electronic components takes up just 3cm by 3cm, typically a third of the area needed for current designs.

This allows phones to be designed that can have, in a typical size handset casing, several standard rechargeable batteries - such as nickel metal hydride (NiMH) AAA micro-cells.

Infineon estimates that an ultra low-cost handset equipped with today's typical rechargeable mobile phone batteries would have a standby time of more than ten days and talk-time of more than four hours.

Market-research company Strategy Analytics recently estimated that more than 150 million such ultra low-cost handsets, costing less than US $50 wholesale, would be sold throughout the world in 2010.