3G Phones Are Losing Weight
By Eric Lin, Fri Sep 10 01:00:00 GMT 2004

In less than a year, manufacturers have halved the average number of chips in a UMTS (3G) handset. Fewer chips mean smaller, cooler, longer lasting phones -- are they finally ready for the big networks?

When the UMTS handsets from 2003 were evaluated at the beginning of the year, no one was pleased. Engineers were disappointed with the high count of integrated circuits(ICs) while carriers were down on the resulting poor battery life, large size and other complaints.

Portelligent has conducted the first evaluation of UMTS phones launched this year and has found marked improvement in the components. The average component count across UMTS handsets has dropped nearly 50% -- from 78 chips for 2003 models down to 40 -- in less than a year. Fewer ICs consume less power and generate less heat, two of Vodafone chief Arun Sarin's complaints about earlier handsets. The lower chip count has also helped to improve physical factors that effect the market appeal of mobiles phones like size, weight and design.

Fewer chips translate into lower manufacturing costs, bringing the total cost of 3G handsets down to a level where it's possible for them to become mass market devices. More than its benefit to the customer, this lower unit cost greatly benefits the carriers. They were already stretched thin from the cost of acquiring and building out 3G networks. If they don't have to spend as much -- or better yet, anything at all -- subsidizing handsets to encourage adoption, that will provide significant financial relief.

This also solves the chicken and egg problem discussed in last year's evaluation. If mass market ready handsets are available, carriers will finally be comfortable launching 3G, and thus shore up their 3G networks, increasing demand for even more highly evolved handsets. Many appealing new 3G handsets have been getting attention lately, including the LG 8120. As more handsets like this become available, they provide a stronger case for European carriers to convert the data-only 3G soft launches into full scale 3G networks.