CDMA INDUSTRY CONTINUES TO DRIVE DOWN THE COST OF CDMA HANDSETS
CDMA2000 3G Handsets Have Reached Price Parity with 2G Handsets
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Costa Mesa, Calif. — April 30, 2007 — The CDMA Development Group (CDG) (www.cdg.org) announced today that the wholesale prices for CDMA2000® entry-level handsets continue to decline rapidly — driven by CDMA industry initiatives, economies of scale, and increased competition — as more entry-level handset vendors enter the market. Over the past year, up to 35 sub-$50 USD CDMA2000 handsets have been introduced into the Indian market from 12 suppliers.
In the latest report on very-low-end (VLE) handsets in India, dated April 6, 2007, the Yankee Group states that in the fourth quarter 2006, there were 17 sub-$50 USD CDMA2000 models commercially available from nine handset manufacturers, including two handsets offered for less than $30 USD. The report also notes that an average selling price (ASP) for sub-$50 CDMA2000 handsets has dropped to $39.29, and the differential between entry-level 3G CDMA2000 and 2G GSM handsets in India has narrowed to within a few dollars . Yet, unlike the voice-only 2G handsets, more than a dozen of the VLE 3G CDMA2000 handsets can access the Internet to download ringtones and wallpaper over the air, and up to three of them have color displays.
With regards to 3G, the cost difference between WCDMA and CDMA2000 handsets remains quite large. Currently, entry-level CDMA2000 handsets are $100-$200 less expensive than low-end WCDMA handsets. This difference, as well as the number of models and suppliers at these price points, represents a significant competitive advantage for CDMA2000 operators around the globe. CDMA2000 represents over 70 percent of the worldwide 3G market.
“In India, the competitiveness of CDMA2000 has enabled 3G handsets to reach price parity with 2G technologies in the entry-level device segment,” said Perry LaForge, executive director of the CDG. “Through industry efforts such as the CDG’s “3G For All” campaign that focuses on common handset procurement specifications and aggregated device purchases, the prices for low-cost voice and broadband data-enabled devices will continue to decline, further strengthening CDMA2000’s business case for developing markets. Our campaign is not limited to one specific vendor; we are seeing results across a number of vendors.”
The key findings of the Yankee Group report are:
- The CDMA2000 device portfolio is less expensive: The Average Selling Price (ASP) in India across the entire CDMA2000 device portfolio remained significantly lower than the GSM portfolio by an average of $51 (ASP for CDMA was $45.16 compared to $96.17 for GSM)
- VLE CDMA Handset Shipments: Up to 88% of CDMA2000 handsets sold in India were in the sub-$50 VLE category
- Price decline of 7% per quarter: The ASP of a VLE CDMA2000 handset in India declined to $39.29, a 7% decrease from $42.26 in the previous quarter.
- Price parity: At $39.24, the ASP for CDMA2000 VLE handsets compares favorably to the ASP of less capable sub-$50 GSM handsets. The price differential between entry-level 3G CDMA2000 and 2G GSM handsets in India has narrowed to $4.34 from $4.40 in the third quarter.
- The selection of the CDMA2000 VLE handsets continues to be robust with a large selection of VLE handsets from different suppliers. There were two sub-$30, seven sub-$40 and eight sub-$50 CDMA2000 models commercially available in the fourth quarter of 2006:
- Sub $30: ZTE Classic 201, LGE 2750
- Sub $40: Rose Classic 631, Jinpeng Classic 101, TCL Classic 401, LGE 2650, LGE 2690, LGE 2710, Motorola W150I
- Sub $50: LGE 2530, Nokia N1255, Jinpeng Classic 131, Jinpeng Classic 132, ZTE C150, Huawei C2205, Haier C1000, LGE 3330
More information on CDMA2000 handsets and a summary of findings of the Yankee Group study are available at http://www.cdg.org/news/press/2007/Apr30_07_handsets_yankee.asp.
CDMA2000 is the most widely deployed 3G technology, with 207 operators in 90 countries, including 57 CDMA2000 1xEV-DO systems, serving more than 325 million subscribers. Counting 2G cdmaOne™ subscribers, there are more than 375 million CDMA users worldwide. CDMA2000 has become the technology of choice for cdmaOne, TDMA, analog and greenfield operators, and is deployed in the 450, 800, 1700, 1900 and 2100 MHz bands. Around 1,650 CDMA2000 devices from more than 90 suppliers have been introduced to the market, including more than 450 1xEV-DO devices. More information on CDMA2000 is available on the CDG Web site at www.cdg.org.
The CDMA Development Group is a trade association formed to foster the worldwide development, implementation and use of CDMA2000 technologies. The more than 130 member companies of the CDG include many of the world’s largest wireless carriers and equipment manufacturers. The primary activities of the CDG include development of CDMA2000 features and services, public relations, education and seminars, regulatory affairs and international support. Currently, there are more than 500 individuals working within various CDG subcommittees on CDMA2000-related matters. For more information about the CDG, contact the CDG News Bureau at +1-714-540-1030, or visit the CDG Web site at www.cdg.org.
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