As a further step in the execution of its growth strategy in China, Royal Philips Electronics has announced the opening of the ULC Design Center in Shanghai. This new global Research and Development center will focus on enabling handset manufacturers to develop ultra low cost (ULC) phones with Nexperia Cellular System Solutions for emerging markets. The decision is part of an overall initiative to address the growing consumer demand for low cost mobile communications in China, India, Africa, South America and Eastern Europe to drive down total handset costs below $15 by 2008.

This design center will drive the company's ULC cost activities in China, working closely with its existing European design facilities and the Bangalore-based Innovation Campus to contribute towards dramatically reducing costs and bringing handsets to the consumer, manufactured at sub-$20. This initiative responds to growing consumer spending in rural China, and plans to offer affordable access to mobile telephony in order to bridge the digital divide.

The first commercially available ULC handsets based on the Nexperia Cellular System Solution will offer voice, SMS and basic multimedia capability, with a black and white screen, providing the basic functionality and low cost desired by new subscribers in emerging mobile phone markets.

Putting the initiative into perspective, Gerard Kleisterlee, president and CEO, Royal Philips Electronics, said, "According to studies by the World Bank, 77 percent of the world's population lives within range of a mobile phone network, but only 25 percent of us subscribe to a mobile phone service. By offering mobile manufacturers an ultra low cost Nexperia Cellular System Solution, we are bringing affordable access to wireless communications for an untapped global consumer base of 3.3 billion people in key markets such as rural China."