LG to ship cheap 3G devices?

South Korean handset manufacturer firm LG Electronics is expected to be named as the winner of the GSM Association’s “3G for All” tender next week.

As another pre-3GSM World Congress rumour hits the wires, LG is understood to have won a tender to produce an affordable, mass market 3G handset.

The GSMA announced the 3G for All campaign at 3GSM Asia in October, following the questionable success of the Emerging Markets Handsets initiative.

3G for All is designed to drive down the cost of WCDMA handsets with the aim of stimulating adoption in both developed and undeveloped markets.

The 3G for All handset should, according to the GSMA, be capable of sophisticated applications “that can support advanced services, such as high speed internet browsing, mobile TV and instant messaging, while costing significantly less than a low-end 3G handset today”.

This may be a step in the right direction for the mass marketing of 3G devices and services but LG is likely to have some concerns.

Twice winner of the EMH contract, Motorola, has discovered the hard way that cheap and featureless devices are far too basic and do not have the margin to be a sustainable business model.

Moto’s head honcho, Ed Zander, recently confessed that such handsets had diluted the company’s operating earnings for the devices unit, despite the firm shipping a record number of handsets.

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