$20 Cellphones in Two Years

If you're tired of investing in the coolest, most expensive cell phones on the market, the winds of change may be blowing. Looks like chip companies have been banding together to bring us phones as cheap as $20 by 2007. Promising us the quality we're accustomed to, the companies are saying that the key to making lower-priced handsets is building in fewer features, and are now working to do things such as integrate key functions into a single chip for just $5. Not bad. Right now, phone producers use about 150 components to assemble a phone; this would obviously ratchet that down—hopefully to around 50 components.

With production prices at that level, the wholesale price of a handset, which includes distribution and other costs, will be at or below $20," said Horst Pratsch, vice president for Entry Platforms at German chip maker Infineon. "Most consumers get their phones directly from their wireless operator, and the retail price is based on the wholesale cost to mobile carriers."
Won't it be nice when the wireless operators don't have us all by the balls?

Chip makers drive race to $20 cellphones by 2007