Texas Instruments has produced a new low-cost mobile phone chip which it hopes will help mobile communications expand in developing countries.

Chief Executive Officer Richard Templeton said entry-level phones serve as both data and voice devices for rural communities in developing countries. "For these people, most likely the first time they connect to the Internet will be through a mobile handset," he said, adding that phones must become more affordable.

The new OMAPV1035 chip - and its "eCosto" platform - expands Texas' existing line of chips for low-cost handsets. It will be manufactured using a 65nmprocess and will support GSM, GPRS and EDGE, the company said.

Unlike its predecessor, the new chip combines the analog radio frequency processor with a digital baseband and application processors on a single chip. As these components were previously on separate chips, the 1035 will allow for slimmer handsets that consume less power, the company said.

The new chip is part of a move by Texas and other mobile handset and handset component manufacturers to lower handset costs, making them more affordable for users in developing countries. In September 2005, the GSM Association set a goal for the industry to create handsets with a wholesale price under $30. Motorola's C113 and C113a were the first two models to hit the price target.

Because the chipset is one of a mobile handset's most expensive components, creating low-cost chips is critical to the success of any effort to make phones more affordable. Templeton said low-cost handsets are aimed especially at large developing markets, including Brazil, Russia, India, and China.