In a development that may lead to mobile handsets being sold for as little as Rs 1,000, Texas Instruments on Monday launched the world's first single chip solution for cellular phones.

This cost-effective single chip for a handset is expected to boost the production of ultra-low-cost mobile phones in emerging markets like India, China and Latin America.

"The operations of a mobile phone, which were performed by several chips, have been packed in a single chip, allowing GSM and GPRS phone manufacturers to cut production costs by up to 30 per cent," Chairman of Texas instruments Tom Engibous said after calling the company's facility in France from New Delhi from a mobile phone using the single-chip solution.

"Our team in Bangalore has developed this technology, which will help narrow the digital divide. Our customers can use it to make ultra-low-cost handsets affordable in largely untapped consumer markets," he said.

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According to Engibous, this solution integrated the bulk of handset electronics onto a single chip to reduce cost, power requirements, board area, and silicon area -- performance factors that are crucial for high-volume entry-level mobile phones.

Texas Instruments has already shipped its products to Nokia for trial runs. Company executives said it would take about nine months for handsets using this solution to hit the market.

Engibous added that it was up to manufacturers to develop low-end handsets. "If they use this solution, then they can reduce prices by half. But it depends on them to take a call on prices," he said.

Despite being developed in Bangalore, company executives said the chip would be manufactured in Dallas, the United States, China or Taiwan.

Indian handset manufacturers like BPL and Quasar are also set to use this technology for their future handset models.

"These designs will serve as a platform for the development of a variety of handsets for different market segments, from ultra-low-cost to mid-range voice- and feature-rich data-centric handsets for BPL and Quasar. The first handsets based on the single chip will be available in BPL handsets by September 2005, while Primus phones using this technology will begin production later this year," said Biswadip Mitra, managing director of Texas Instruments India.