CDMA phone sets low-cost bar

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LG Electronics' RD3330 CDMA phone for Indian cellular markets keeps component count and feature set to a minimum to meet aggressive production cost targets. Aside from sporting a color LCD, the RD3330 is a fairly bare-bones affair that still comfortably handles the killer application for the cell phone—voice calling.

As cellular-phone service penetration rates have increased to the point of saturation in many places, the focus turns to low-subscriber-rate countries for continued growth. The GSM Association (GSMA) has made a quite-public push for low-cost handsets so as to stimulate demand in the unserved and underserved markets around the world. In these regions, cost is king, and MP3-playing, picture-taking, media powerhouse handsets are out of the question for most.

While GSM may be the dominant global wireless standard, it is not the only protocol used in developing countries; CDMA enjoys a relatively good footprint in many emerging cellular markets. Thus, the low-cost terminal challenge that GSMA has issued extends in quieter fashion to the CDMA world as well.

The LG RD3330, also known as the Rangeela, is a candy bar cell phone featuring a 65,536-color supertwisted-nematic (STN) display, messaging, 2,000-name phone book, 99 speed dials, paging, airplane mode, caller ID and rhythmic lighting for incoming calls. The design sup- ports English and Hindi menus and Hindi SMS, and has personal management features such as an alarm, converter, to-do list, memo and clock.

Cost reduction begins with the chips, and for CDMA that means Qualcomm. Via Telecom and Texas Instruments have both put forth efforts to create entry-level CDMA chip sets, but the battle has been tough. In our experience, Qualcomm has thus far kept the competition largely at bay. While competitive dimensions to CDMA chip set production may be blunted, marketplace conditions form a competitive dimension all to themselves. Quite simply, Qualcomm cannot hope to serve entry-level markets in competition with GSM by selling grossly overpriced components. Lower-cost solutions are a must if it wishes to participate in the low end.

And the RD3330 illustrates one dimension to Qualcomm's CDMA platform offerings for low-tier handsets, a strategy I call "recycle, reuse, reduce." The first principle—reuse of existing platforms leveraging the amortization of sunk design costs—is demonstrated here by the MSM6000-based solution of the Rangeela.