New Freescale Chip Could Herald Cheaper Kindle

Published on March 1, 2010
by John Paczkowski

Freescale Semiconductor, an ARM licensee and the company responsible for the chips used in the majority of e-book readers, has developed some new silicon that it claims could help drive prices of the devices below $150 before the end of this year.

The i.MX508 applications processor, as Freescale has christened it, integrates an ARM Cortex-A8 processor core and E Ink’s hardware-based display controller into a system-on-a-chip that the company claims delivers twice the performance of its previous eReader chips (it runs at 800 megahertz). It also happens to be more energy-efficient and significantly cheaper.

According to Freescale marketing director Glen Burchers, the chip will cost less than $10 in volume quantities and will drop the unit price of e-readers that use it by at least $30.

“There’s a big unsaturated market out there, and price is a big factor,” Burchers told Bloomberg. “We do see the price of e-readers coming down this year, and Freescale is trying to facilitate that. That’s a lot of what this chip is doing.”

For Freescale customers like Amazon (AMZN), the i.MX508 couldn’t come at a better time. With Apple (AAPL) about to redefine consumer expectations for e-readers with its multipurpose iPad, Amazon will increasingly need to differentiate its single-purpose Kindle on price.

Dropping the retail price of the basic version of the device to around $150 from its current $259 would certainly do that. If that’s possible. Obviously, the cost of E-Ink displays and the Kindle’s other components need to come down as well.

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