Cell Phone On A Chip

sebFlyte writes "Texas Instruments have developed a new chip for mobiles that, according to some, should make is possible to make a cell phone for less than $25, bringing it into the realm of possibilities for low-level corporate giveaways, or a reasonable loss leader for getting people started on pay-as-you go mobile offerings."

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Maximum Functionality at Minimal Price Point

[reporter]

The marketing idea that Texas Instruments (TI) has developed is a rehash of an old idea: set a low price point and maximize the amount of functionality that can be sold at that point. One of the earliest examples is the VIC-20 computer from Commodore. It set the price of the contraption at (I think) $199.95, and then the engineers put as much functionality as they could into the product at the price point. The VIC was a smashing success even though William Shatner (ouch!) served as the spokesmodel.

Here, TI is setting a low price point for the chip/chipset and cramming as much functionality as TI's engineers can force into the chip/chipset. Over time, such efforts become easier because the feature size of integrated circuits becomes smaller, and you can simply put more "stuff" into a fixed area of chip. Further, the area of the chip determines its price to a first-order approximation.

I wish that someone would do another VIC-20. For $200.00, I bet that we could get an awesome computer, but I doubt that any of the traditional companies like HP, IBM, and Sony would be interested. The profit margin would be minimal. So, these companies continue to set a high price point, say, $2000.00, and sell a system with commensurate functionality -- a lot of functionality that I simply do not need for reading e-mail and posting articles to SlashDot.