Texas Instruments Inc, which makes computer chips for more than half the world's cellular phones, said it is testing a new technology that could drive down the price of high-end features.
The big semiconductor company said it has developed a single chipset that contains a modem and a processor on a single piece of silicon, replacing two components with one.
Company officials say the new design will make it cheaper to build a phone that runs video at 30 frames per second or handles 3-D gaming, capabilities available now only on expensive phones.
"We're going to drive them down into meat-and-potatoes phones that have the largest market share," said marketing vice-president at Dallas-based Texas Instruments, Doug Rasor.
The company announced the new chip design before the opening of a major trade show for cell-phone makers and suppliers, held in the French resort city of Cannes.
The new technology, called OMAP-Vox, would also use less power than current chips, the company said. Phone manufacturers are testing it and it could show up in store displays by the end of this year, Rasor said.
Texas Instruments declined to identify the companies that are testing the new design beyond saying one is in Europe and another is in Asia.
Senior analyst with technology research firm In-Stat Neil Strother said the Texas Instruments component could help bring the cost to produce a feature-laden phone down to about $125-150. That could mean a $75 price to the consumer.