Welcome to Smartphones Unlocked, my new monthly column designed to explain the ins and outs of smartphones to help you better understand how they work. The world of smartphones is fast-paced and can sometimes be confusing and difficult to keep track of all the new technology in these devices, particularly if you’re new to them, so if there are any topics you’d like to see covered here, please feel free to e-mail me at bonnie.cha@cnet.com.

There are a lot of things to consider when buying a smartphone–operating system, screen size, keyboard or no keyboard, camera–but one feature that more people are starting to pay attention to is the processor. This is, no doubt, in part due to the recent influx of dual-core smartphones like the Motorola Photon 4G, HTC Sensation 4G, and Samsung Galaxy S II.

The Samsung Galaxy S II is one of a number of smartphones today to feature a dual-core processor, but what does that mean for you?

With everyone from carriers to handset manufacturers to tech sites talking up dual-core processors, you probably get the idea that having a dual-core processor is a good thing, but for the uninitiated, it might not be apparent why, and for some, the whole subject of processors might be a mystery. It’s easy to understand why; it’s a spec that gets thrown around a lot, along with various names like Nvidia Tegra 2, Qualcomm Snapdragon, and TI OMAP, but it’s a feature that’s never fully explained and frankly, the business of processors can get pretty complicated and technical.

For this month’s column, I’m going to take a general approach to the topic and explain the processor’s function, explain the different parts, how they affect your smartphone’s performance, and give you a glimpse of what’s to come in the future. I’ll also introduce the various chipset makers, but there’s quite a bit of variation in how each of the companies design processors and this is where things can get a bit complicated, so I’ll save the comparison of each for a future column. That said, hopefully, this will serve as a good starting point to better understanding the world of smartphone processors.

What’s in a processor?
Nowadays, smartphones are so much more than phones and personal organizers. They’re music and video players; they’re mobile Web browsers and; they’re cameras and camcorders. However, in order to do all those things, there needs to be a part of the system that can process and carry out those functions, which is where the processor enters the picture.

“The processor is the brain of the smartphone,” explains Nick Stam, director of technical marketing at Nvidia. “Just like a regular desktop or laptop, these devices are, at the highest level, computers, and like computers, they have a processor to do all the basic calculations and to execute code.”

Of course, with smartphones, you’re dealing with a smaller form factor, so the design of the processor is somewhat different than what you’d find on your computer. On your desktop, you’ve got different elements, such as your Central Processor Unit (CPU), Graphics Processing Unit (GPU), memory, and peripheral buses, that all connect to the motherboard.

On a smartphone, you’ve got similar components, as well as other sub-processors, but they’re integrated onto a single chipset, referred to as System-on-a-Chip (SoC), since there isn’t room to have different chipsets with the battery taking up so much space. So technically, when we talk about processors, we’re really talking about the SoC, but for pretty obvious reasons,

Inside Nvidia’s Tegra 2 chipset, or System-on-a-Chip, lies multiple components, including two CPUs, a GPU, and video encoders and decoders.

A key component of the SoC is the CPU. Most companies use a CPU based a design from a company called ARM, and it handles most things you experience on your smartphone, from running the OS to touch-screen functions. When people talk about whether a phone has an 800MHz processor or a 1GHz processor, they’re referring to the speed of the CPU. Additionally, single-core or dual-core refers to the number of CPU cores.

Another element of the SoC is the GPU. The GPU processes graphical and visual data, so it’s responsible for such things as rendering Web pages and game play. Having a dedicated GPU is much more efficient than letting the CPU handle it, since it allows for lower power consumption while offering such benefits as better image processing and anti-aliasing and geometric realism. The better the GPU, the better experience you’ll have viewing complex Web sites and 3D video games.

Finally, the SoC incorporates a number of other sub-processors, such as video encoders and decoders, camera operation, and audio playback, so your smartphone can perform such tasks. Some companies also incorporate a phone’s modem (Wi-Fi, Bluetooth, GPS, 3G/4G, etc.) into the SoC, while others keep them separate, which leads to the next topic.

Not all processors are created equal
Now, just because two smartphones both have 1GHz processors doesn’t mean you’re going to get the same kind of performance from both. This is because different chipset makers take different approaches to designing their processors or SoC.

There are four major players in the mobile processing world, Nvidia, Qualcomm, Texas Instruments, and Samsung, but they’re all have one thing in common: ARM. ARM is the company that provides the architecture for mobile processors, and these companies use it as the basis for developing their chipsets. So what’s the reason for variation?

This is because some companies license ARM’s CPU design and use it as is, while others only license the instruction set and create their own CPU based on the guidelines provided by ARM. Qualcomm is an example of the latter, which is why you see some of its dual-core processors clocked at higher speeds, such as 1.2GHz. Add to that different kinds of GPUs and various integrations of sub-processors and modems, and you’re going to get some different results.

Again, I’ll compare each of the manufacturers processors in a future column, but for the sake of sticking with the basics for this article, I left it out.

Dual-core and beyond
As I mentioned earlier, smartphones already do a lot of things, but the advent of dual-core processors has allowed them to do even more, such as 3D and 1080p HD video capture and playback. These chipsets consist of two CPU cores, running at 1GHz to 1.2GHz each, depending on the maker, but it would be a mistake to think that a dual-core processor equals double the speed of a single-core phone. The difference isn’t quite that dramatic.

Qualcomm plans to offer quad-core processors in Q1 2012.

That said, you should enjoy faster Web browsing, smoother game play, quicker multi-tasking, and even improved battery life.

“When you have a single CPU core, you need to raise of the voltage of the CPU, which consumes a lot of power,” said Sridhar Ramaswamy, senior technical marketing manager for Tegra at Nvidia. “With two cores, you’re basically processing at half the frequency and not maxing out, so it better handles multi-tasking and multi-threaded applications.”

It’s only going to get better too. Several chipset makers, including Qualcomm, Nvidia, and TI, have already announced plans for quad-core processors. Nvidia began promoting its next-gen Kal-El quad-core CPU back in February with a scheduled release for this fall, and Qualcomm will follow in Q1 2012.

“Existing functions on smartphones will get better and better, as they will get more powerful and power-efficient,” said Raj Talluri, vice president of product management at Qualcomm. “They’ll also do more and more things, and we see the use of gestures, augmented reality, and increased wireless connectivity between devices becoming more popular in the future. Next year’s smartphones are just going to be great products.”

There’s a reason why search companies, advertisers, payment processors and local merchants are so interested in smartphones. It’s because they’re turning out to be a powerful and popular tools for people looking to search locally, act quickly and improve their shopping experience. That’s the conclusion of a new smartphone user study commissioned by Google .

Google obviously has a big stake in these results, which were culled by research firm Ipsos OTX from 5,013 U.S. smartphone users at the end of 2010. But the numbers underscore why Google, Facebook, and Groupon as well as a host of marketers, app makers and merchants are so hot for smartphones. It’s because they really do fit certain use cases that unlock money-making opportunities.

The survey found that 95 percent of smartphone users have looked for local information, with 88 percent of these users acting on information within one day, most often contacting or visiting a business. This is consistent with other survey results, and it really brings home how intent-driven users are when they search on a phone. They are often looking for something specific and they’re ready to move quickly. That’s a huge opportunity for merchants and brands to get in front of users who are on the cusp of making a purchase decision. As we’ve noted earlier, Google is already seeing great results with its click-to-call feature in local search ads, which leverages this behavior.

The key point here is that smartphone users are ready to take actions: Nine out of ten smartphone searches end in an action. And search engines are the most commonly visited websites at 77 percent, ahead of social networking, retail and video sharing.

Smartphones are playing a growing role for shoppers, who are wielding them to find deals, pull up research and locate businesses. The survey found that 79 percent of respondents used their smartphones for shopping and three out of four smartphone users make purchases either in store or online using their phones. Seven out of ten smartphone users turn to their phones while shopping in a store, showing that the phone is in use often from the time research begins until the moment a purchase is made.

The survey also found that smartphone users spent a median of $300 on purchases in the past year through their smartphone. This is consistent with other news we’ve heard. For example, eBay said global mobile sales hit $2 billion last year while Scanbuy reported that mobile barcode scanning activity was up 16x in 2010 over 2009. This also points up the growing importance of mobile payments, which will be a big battleground for players like Square, Paypal and others.

For advertisers, the smartphone is providing a new chance to reach users who are often ignoring online ads. Seventy-one percent of users conducted a search based on an ad exposure and 82 percent notice mobile ads, with half of them taking some kind of action, most often making a purchase (49 percent) or visiting a website (35 percent). This is consistent with what I’ve been hearing from mobile ad executives, who say mobile ads are a new opportunity because they’re more effective and memorable, particularly more rich mobile ads.

Overall, the survey highlighted how wedded people are to their smartphones. Ninety-three percent of people use smartphones at home with 39 percent admitting the use of their smartphone in the bathroom. The study found 72 percent of users used a smartphone while consuming other media, including a third who watched TV.

That’s what makes the smartphone so potent. It’s with people at all times and it’s a versatile tool in the hands of consumers, who are only going to use them more and more. The implications for retailers, merchants and advertisers is huge. They need to optimize sites for mobile, make themselves visible to mobile phone users, consider launching mobile apps and they need to figure out how to engage this mobile audience because they’re much more informed and active then previous shoppers. For many merchants, it makes increasing sense to formulate multi-channel strategies that cover mobile, social and in-store campaigns. The smartphone is changing everything and businesses need to catch up if they want to take advantage of all this upheaval.

Chinese vendor also said it aims to be among top three tablet makers this year.
Chinese telecommunications equipment and mobile device maker ZTE Corp. said Tuesday it aims this year to become one of the top five makers of smartphones powered by Google Inc.’s Android operating system.

In a statement, ZTE also said it aims to become one of the top three makers of tablet computers this year. It didn’t specify by what measure, either for tablets or for Android phones.

The company said its target is to ship 12 million “smart terminals” in 2011. It didn’t define the term “smart terminal,” but it likely refers to smartphones and other mobile computing devices such as tablets.

Total terminal shipments in the first quarter rose 47% from a year earlier to 22 million units, the company said. Terminals include mobile phones and wireless modems that let a laptop connect to the internet through a cellular network.

ZTE in January said its sales of terminal products rose nearly 50% in 2010 to 90 million units, and the company aims to become one of the world’s top three handset vendors in five years. It also said it expects to sell 120 million terminal units this year.

Region’s smartphone shipment to reach 200 million by 2016 with Android as leading platform, outpacing Apple iOS and Microsoft Windows Phone 7, reveals new report.

Asia’s smartphone market will double its size by 2016 to reach 200 million shipments, where Android will emerge as the dominant platform as it “dramatically” outperforms Apple’s iOS and Microsoft’s Windows Phone 7, according to a new report.

Market research firm Ovum said in a statement Thursday that global smartphone sales will hit 653 shipments that same year, of which Asia will account for 30 percent.

Principal analyst, Adam Leach, noted in the report that the smartphone market will see significant growth over the next five years, “once again outperforming the wider mobile phone market”.

According to Ovum, smartphones in the Asia-Pacific will grow at a compound annual growth rate of 12.5 percent between 2009 and 2016, and eventually account for 32 percent of the region’s overall mobile phone market.

Leach added that Android will dominate Asia’s smartphone platform market with a 38.7 percent market share by 2016, “dramatically outperforming” Windows Phone 7 which will account for 22.6 percent, Apple iOS at 19 percent share and BlackBerry OS at 9.2 percent.

The analyst noted that Android’s success can be attributed to “the sheer number of hardware vendors supporting it at both the high and low ends of the market”.

The Google mobile OS runs on smartphones from various handset manufacturers including Samsung, Sony Ericsson, HTC, Motorola and LG.

While Android may have pole position, Leach pointed out that at least one other platform is expected to achieve mainstream success within the forecast period. “This could be an existing player in the market such as WebOS, MeeGo or Bada, or a new entrant to the marketplace”, he said.

Hewlett-Packard last month unveiled two smartphones powered by its WebOS platform, the result of the 2010 Palm acquisition.

In addition, the recently-minted partnership between Nokia and Microsoft has “redrawn the smartphone market”, the Ovum analyst highlighted.

He noted that with Nokia using the Windows Phone OS, there will be significant reduction of Symbian-based handsets, despite the Finnish phonemaker’s estimates that it will ship 76 million Symbian-powered phones beyond 2012.

Ovum’s observations corroborate with a Mar. 10 report by IDC, which stated that Nokia’s transition to Windows Phone will pave the way for Android platform to take a lead in the Asia-Pacific region.

Other studies also yielded similar predictions about Android’s ascension as the leading mobile platform and success from Asia’s booming smartphone sales. A Frost & Sullivan report last July stated that mobile social networking will cause smartphone sales to “skyrocket” in the Asia-Pacific region, accounting for 54 percent of all devices sold in the region by 2015.

Canalys last month announced that Android overtook Symbian-based smartphones as the top platform globally. The research firm said shipments of Android phones reached 32.9 million in the final quarter of 2010, edging out Nokia’s Symbian platform which saw 31 million shipments.

Tweeting trees and a pink monkey robot that lets kids make video calls to mom’s or dad’s smartphone—these are the new citizens of the so-called connected society.

Amid the flurry of new smartphones and Internet-connected tablets, a wide range of more exotic devices was on show at the recent Mobile World Congress in Barcelona that point to a future in which consumers and devices are connected wirelessly in new ways.

Ericsson and other companies displayed eye-catching devices at the Mobile World Congress in Barcelona last week.
.And not all are as frivolous as they may first appear.

Sure, Telefon AB L.M. Ericsson displayed an orange tree with a wireless-network connection and sensors that can tell when a person comes near and reacts to its environment by sending posts to Twitter such as, “I feel like a star. 191 handshakes in an hour.”

But the concept was an eye-catching way to show how mobile technology can be used and repurposed for commercial purposes, like wireless advertising, said Ericsson, the world’s largest maker of mobile network equipment.

The monkey robot, from South Korean telecom operator KT Corp., will reach stores in the country next month and can be controlled via smartphone to roam around the house so parents can keep an eye on the kids.

Other devices on display had a more immediate practical use. U.S. telecommunications company AT&T Inc., for example, unveiled a connected drug dispenser that blinks and beeps if medication is missed. The dispenser also sends weekly consumption summaries to a smartphone application.

There are huge commercial opportunities for the mobile industry in emerging fields such as wireless health services, Paul Jacobs, chief executive at U.S. chip maker Qualcomm Inc. said in a keynote speech.

Meanwhile, consulting and technology-services group Accenture PLC has teamed up with the insurance industry to create a connected vehicle sensor that warns if a driver goes over the speed limit.

If innovation continues at the current pace, by 2020 there will be an estimated 15 billion devices with so-called embedded mobile functionality, including a wide range of products, such as Internet tablets, refrigerators and cars, said Ton Brand, senior project director at GSMA, the mobile industry’s trade group. That is up from an estimated 500 million devices in 2009, mostly consumer items such as notebooks, he said in an interview.

Ericsson is even more bullish, forecasting 50 billion connected devices by 2020, although the GSMA’s prediction includes SIM-enabled devices that aren’t mobile phones and Ericsson’s wider definition covers all kinds of connections, Mr. Brand said.

He said four categories look particularly promising: consumer devices, such as tablets and GPS navigators; wireless health care; in-vehicle features; and smart grids for utilities.

“The tech is already there, so that’s not a problem,” he said. “The question is how to turn it into a viable business.”

There are few limits to the possible business applications, said Mats Norin, head of Ericsson’s unit for Mobile Broadband Modules, which builds wireless-connectivity gear for embedded devices.

As the technology gets less expensive, barriers to entry go down and entrepreneurs can enter the evolving market, he said.

There is money in it for Ericsson as well, Mr. Norin said, not only in broadband module sales but also because the data traffic generated by the new connections will increase the need for operators to invest in network capacity.

In addition, operators will earn significant revenue, from rising data traffic and as new wireless opportunities open up in cars and industrial equipment, said Ryuji Yamada, CEO of Japan’s NTT DoCoMo Inc.

According to research firm Gartner, mobile-services revenue world-wide is expected to grow steadily over the next few years, to around $1.11 trillion in 2014 from $903 billion last year.

Still, the industry needs to deal with a number of roadblocks.

Ericsson’s Mr. Norin said there is work going on to solve technical challenges, like connectivity modules that are inexpensive enough for the mass market and functioning antennas for all kinds of new appliances.

Privacy is also an issue, said Tony Jackson, director of telecom solutions for Convergys Corp., a U.S.-based provider of software for customer-relationship management and billing.

For example, smart electricity grids with connected meters let utilities fine-tune rates and consumers gauge the cost of activities such as taking a hot bath.

But the collected power-usage data also give a clear indication of when homeowners are on vacation, potentially exposing an empty house to burglary.

The industry needs to handle data gathered by smart devices securely and convince consumers that data mining is to their benefit, Mr. Jackson said.

Common certification standards also are needed to resolve regulation issues, said GSMA’s Mr. Brand, adding that telecom operators will need to engage with companies in other industries under different regulatory frameworks.

The technology is already there, for the most part.

“It appears to me that the revolution envisaged, or at least part of it, could dissolve the social nature of human beings,” said Saverio Romeo, senior analyst at consulting firm Frost & Sullivan. “The mobile industry should reflect on this.”

WASHINGTON–The Federal Communications Commission approved a request Wednesday to allow a satellite broadband start-up funded by investment firm Harbinger Capital Partners to lease its airwaves for traditional mobile phones.

The agency approved a request by Harbinger-backed LightSquared to drop a requirement that airwaves set aside for satellite-phone use aren’t primarily used instead for ground-based phone networks.

The FCC’s action means that LightSquared can lease its airwaves to companies that offer normal smartphones such as the iPhone, and not pricier satellite-enabled phones. LightSquared plans to sell wholesale access to a fourth-generation network using LTE technology to phone companies and other wireless carriers.

The FCC’s decision is part of a broader effort by FCC Chairman Julius Genachowski to set aside more airwaves for wireless broadband access. In his State of the Union speech Tuesday night, President Barack Obama said he wants to ensure 98% of Americans have access to wireless Internet in five years.

LightSquared is a Virginia-based start-up that has been funded mostly by Harbinger, an investment fund run by Philip Falcone. Harbinger, based in New York, has invested billions to launch a national broadband wireless network.

Global-positioning-system makers and users had raised issues about LightSquared’s request, saying that the use of those airwaves by millions of cellphones could cause interference with existing GPS devices.

The Commerce Department asked the FCC to hold off on granting a waiver until after the GPS interference issues raised by the Defense Department, Homeland Security Department and other agencies had been resolved.

The FCC said it won’t allow LightSquared to sell its wholesale broadband service until it is satisfied the service won’t interfere with GPS devices. It isn’t clear how long that process might take. The agency will require LightSquared to submit monthly progress reports on GPS interference issues.

In a written statement, the company said it “pledges a diligent effort to work with all interested parties” to resolve the GPS interference issues.

Harbinger, LightSquared’s primary backer, once oversaw $26 billion in assets, but now has closer to $6 billion after its hedge funds lost money on investments and clients withdrew money. The firm’s biggest bet is on the wireless-satellite communications plan that has been under FCC consideration. With roughly half of its assets in the plan, investors say, Harbinger looks more like a private-equity firm with concentrated, long-term investments rather than the diversified hedge-fund firm it once was.

Harbinger’s shrinking size and strategy shift have led to departures of investment staff lately. The firm’s main fund fell about 12% last year, according to investors.

SAN FRANCISCO (MarketWatch) — Growing demand for smartphones has fueled recent investor confidence in companies that make chips and handsets — as well as those who run the networks.

In particular, three key companies in this market that are reporting results next week have seen their shares bid up notably over the past few months.

Verizon Communications Inc. (NYSE:VZ) is up more than 9% over the past six weeks. The stock has cooled a bit since hitting its highest point in nearly three years earlier this month — prior to the carrier’s announcement that it would begin selling the popular iPhone 4 in early February. Read full story on Verizon’s iPhone debut here.

The stock has sharply outperformed rival AT&T Inc. (NYSE:T) , which has slipped back to its pre-holiday level.

Motorola Mobility (NYSE:MMI) has watched its shares jump by 12% since the stock began trading officially on its own on Jan. 4, following a spin-off from its Motorola Solutions counterpart. Mobility shares began trading on a when-issued basis at $27.50 in mid-December, and the shares have surged by 40% since that period.

Qualcomm Inc. (NASDAQ:QCOM) is up more than 9% in the past six weeks and climbed an impressive 42% in the past six months.

The three have helped to drive growth of the Nasdaq Telecommunications Index (NASDAQ:IXTC) by about 7% since the beginning of November — similar to the performance of the broader Nasdaq Composite Index.

All three companies are considered key plays on the fast-growing market for smartphones. Verizon is one of the country’s largest wireless carriers that has been competing hard with AT&T since the latter got an exclusive deal to sell the first iPhone from Apple Inc. (NASDAQ:AAPL) in 2007.

Since then, AT&T has watched its smartphone business grow rapidly. Verizon has pushed back with heavy promotion of alternative smartphone platforms such as Google’s (NASDAQ:GOOG) Android operating system and the BlackBerry platform from Research In Motion (NASDAQ:RIMM)

Verizon is slated to report fourth-quarter results on Tuesday morning. Analysts are expecting earnings of 55 cents a share, up from 51 cents in the same period last year, with revenue declining by 14% to $26.5 billion, as more of the traditional wireless business fades away. The company’s guidance for first-quarter earnings, however, may be lower, given the subsidies it will have to pay out for the iPhone.

“The key investment issue for Verizon investors, in our view, is how the iPhone will impact earnings after 2011,” wrote Shing Yin of Citadel Securities.

The analyst predicted that, by 2012, Verizon’s margins “should reap the benefit of higher postpaid ARPU [average revenue per user] driven by rising smartphone penetration.”

AT&T will report its own results Thursday morning. It will be the carrier’s final period with exclusive access to the iPhone. Analysts expect earnings of 54 cents a share on revenue of $31.5 billion, according to consensus estimates from FactSet Research.

Motorola will report results on Wednesday afternoon. Analysts expect earnings of 36 cents a share on revenue of $3.4 billion.

Closely watched will be the company’s smartphone shipments for the quarter as it launched new Android handsets with both Verizon and AT&T. Its forecast will also be watched, as Motorola is expected to launch a tablet device later this quarter.

“We believe Android has a positive impact on pricing power of Android-backed vendors, already visible in Motorola’s sequentially improving gross margins since the first quarter of 2010,” wrote Pierre Ferragu of Bernstein Research in a report Friday.

Qualcomm also reports results Wednesday afternoon. The company makes chipsets and licenses other technology for smartphones and other wireless devices. The company is also expected to benefit from the expansion of the iPhone, which will employ its CDMA technology at Verizon.

“We believe Qualcomm continues to see solid traction in Snapdragon and integrated solutions,” wrote Tim Luke of Barclays in a note earlier this week. Snapdragon refers to a chipset solution used in smartphones and other portable devices.

With the Chinese government aiming to exceed 100 million in 3G users, the market should soon see smartphones under US$100, and generous subsidies from telecom carriers is important as well, according to James Shen, senior director of Qualcomm Venture China.

To lower smartphone cost, open platforms such as Android will be essential, and Shen expects Qualcomm to capture a large share of the China market given the company’s experience with the operating system.

For the Taiwan smartphone market, Benjamin Ho, executive vice-president of telecom service provider Far Eastone Telecommunication (FET), indicated that smartphones priced at around US$150 will hit the stores in the first half of 2011. He added that the price is already quite competitive, and any lower could affect the specifications and functionality of devices.

Shen and Ho made the remarks at a 4G seminar held in Taipei.

Nielsen said smartphones now account for 29.7 percent of all mobile phones in the United States.
According to a report released Wednesday by the Nielsen Company, a market research firm, 30 percent of all mobile phones in the United States are now smartphones as customers move away from standard-issue mobile devices. The trend is expected to continue as consumers jump to the Apple iPhone, Google Android platform and the new Windows Phone 7 devices.

The report found the iPhone and RIM’s BlackBerry are “caught in a statistical dead heat with 27 percent of smartphone market share in the U.S.” They were followed by Android, which commands 22 percent of the nation’s smartphone market.

But these numbers could all change in the coming months as people buy new phones for the holidays and more people make the switch to smartphones.

In a survey accompanying the report, 35 percent of current smartphone owners said they planned to buy an iPhone for their next phone upgrade, while 28 percent said they hoped to go with the Google Android operating system.

The survey also found that “women planning to get a smartphone are more likely to want an iPhone as their next device, with slightly more males preferring Android.”

Although the number of customers prepared to purchase the new Windows Phone 7 were much smaller than those wanting Apple and Google devices, the survey found that 7 percent of current featurephone owners “desired” Microsoft’s new mobile operating system.

Although Windows Phone 7 hasn’t really affected the growth of the iPhone or Android, it is nibbling at the heels of BlackBerry, which is losing market share.

As Qualcomm, ST-Ericsson, MediaTek and China-based IC design houses have offered cheap Android-compatible IC solutions for China-based smartphone vendors, many entry-level Android smartphones will be available selling below US$100 in the China market in 2011, according to Taiwan-based makers.

The other IC designers offering such solutions include Taiwan-based Infomax Communication and China-based HiSilicon Technologies and Fuzhou Rockchip Electronics, the sources indicated.

Android smartphone ICs priced at US$8-15 are estimated to lead to total PCB assembly costs of US$30-50, factory makers’ quotes of US$70-80 and finally retail prices of less than US$100 for a smartphone, the sources analyzed.

Qualcomm’s and ST-Ericsson’s offering of such inexpensive IC solutions is to prevent MediaTek from dominating the market segment. MediaTek’s Android 2.1 MT6516 platform has won adoption by many China-based smartphone vendors and will it offer the 3.5G Android MT6573 platform in the second quarter of 2011, the sources noted.

Qualcomm has the competitive advantage of being able to most quickly update IC designs to Android versions due to its close cooperation with Google, whereas MediaTek gains the upper hand in terms of cooperation with China-based handset designers and vendors, the sources indicated.