Texas Instruments (TI), the world’s largest maker of chips for mobile phones, believes a GSM (Global System for Mobile Communications) handset costing as little as $20 could be available by the end of this year as part of the drive to provide ultra-low-cost phones to people in poor nations.

The company plays a vital role in determining handset costs because it makes the most expensive part of a mobile phone, the chips that run them. To reduce handset costs, TI combined the jobs of four chips onto a single chip, reducing the amount of material needed to make the handset.

Nokia was among the first handset manufacturers to adopt TI’s single-chip product in early 2005. Since then, TI developed a more standard single chip product for the broader market named “LoCosto“, which a number of mobile phone developers have signed up to use, including TCL Communication Technology Holdings and other Chinese handset makers, said Desmond Wong, a TI spokesman based in Shanghai.

“We have a roadmap to further reduce overall system costs,” he added.

The drive to create ultra-low-cost mobile phones for poor nations has been championed by the GSM Association (GSMA), an industry group that includes companies from throughout the telecommunications sector. The handsets are aimed at the over 1 billion people in emerging market nations such as Bangladesh, China, India, and Russia that lack the money to purchase conventional mobile phones. In fact, while around 80 percent of the world’s population has wireless coverage, only about 20 percent subscribe to mobile services, largely because of the cost of mobile phones, according to the GSMA. Via InfoWorld