Qualcomm Inc. is introducing a new product designed to bring faster wireless service to basic, lower-priced cellphones in emerging markets, an attempt to bolster the chip giant's reach among consumers who can't afford smartphones.

The new product, which starts shipping in the second quarter, includes a processor along with other hardware and software that will enable so-called feature phones to take advantage of today's faster wireless networks, the company said. The new offering -- designed for phones to be sold in markets such as India, Latin America and Southeast Asia -- allows for longer battery life and faster access to social media and other content, it said.

In those markets, Qualcomm said, feature phones typically cost from $15 to $50 and were designed for older generation -- 2G and 3G -- wireless networks. Feature phones made with the new Qualcomm chips will cost about $50 and be designed for the current 4G wireless network.

Qualcomm has long focused on the pricier smartphone market, which boomed for much of the past decade but has stalled recently. The company now is looking for growth in adjacent markets, says Jon Erensen, a research director of Gartner Inc. Feature phones, while less lucrative, are growing quickly in emerging markets.

Last year, about 56% of the mobile phone shipments to India were feature phones, according to Qualcomm, citing research firm IDC Corp. The share was 62% in Indonesia and 49% in Vietnam. Indian carriers already are upgrading their networks. Other companies are targeting demand for faster wireless in emerging markets. In February, for example, Lava International Ltd., an Indian manufacturer of handsets and tablets introduced a 4G-enabled feature phone.

The new product represents a shot at rival MediaTek Inc., a Taiwan-based semiconductor company that traditionally was strong in feature phones but in recent years has pushed aggressively into the smartphone market that has been Qualcomm's stronghold.

Though the new Qualcomm-based 4G devices are expected to be more expensive than typical feature phones, Qualcomm is banking that the new phones will improve the experience enough to induce consumers to pay up. The phones won't have the capability or the flexibility of smartphones and aren't expected to be able to access an app store, but they likely will come with some preloaded apps and better ability to watch video wirelessly, Qualcomm said.

The pricier 4G feature phones will compete against low-end smartphones that can cost about the same, Mr. Erensen said. The degree to which the 4G feature phones take off, he said, partly will depend on what kinds of incentives and subsidies the telecom carriers offer to move customers from their 2G and 3G phones to 4G to free up wireless spectrum so that their networks will be able to handle increasing amounts of data.

By: DocMemory
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