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Qualcomm Rewires for India

The chipmaker wants a sub-$100 smartphone for the world’s second-largest mobile market

One late-summer afternoon, Rahis Khan proudly displays a $40 Soly Elisom phone—not to be confused with a high-end Sony Ericsson. Khan, 25, works at a tiny electronics shop in the Palika Bazaar, a sprawling underground market in New Delhi. He carries real smartphones, too, but few customers want them. “They’re very expensive,” he explains. “Too expensive for this market.”

Qualcomm Chief Executive Officer Paul Jacobs is trying to change that. The San Diego-based company is the top producer of processors for handsets running on Google’s Android operating system and aims to make smartphones more popular worldwide. With its large middle class and advanced telecom infrastructure, China has already become Qualcomm’s top market, accounting for 29 percent of revenue last year. In other emerging markets, however, the company is still trying to persuade merchants to push legit smartphones with Qualcomm chips rather than lower-end knockoffs. In large part, that’s because Qualcomm-powered devices can be expensive: An HTC phone unveiled in late August, for instance, offers glasses-free 3D-viewing and costs more than $700. “Prices need to come down for devices to get out into the mass market,” says Jacobs.