The Sony-Ericsson T68 mobile phone exemplifies the kind of feature-rich, high-margin handset the wireless industry is banking on for future profits. Its hardware design reflects the trend toward more compact, powerful silicon.

The T68 packs an impressive feature set into a compact 84-gram package. With a color LCD, triband "world phone" GSM support, General Packet Radio Service data capability and an IrDA-plus-Bluetooth interface for cable-free connectivity to other gadgetry, the T68 represents a new class of mobile phones fighting the commoditization tide.

A direct-conversion transceiver from Ericsson and a power amplifier module from Conexant form the T68's GSM radio; an Ericsson-manufactured module separately implements Bluetooth. The small area (less than 20 cm2) and low component count (roughly 100 parts) of the triband GSM and Bluetooth RF sections highlight the rapid changes descending on the radio business. Remaining T68 components are tied to the rising value-add in mobile phones: processing, memory and displays.

Components from Texas Instruments and Philips/VLSI manage the baseband, control and applications. Fujitsu and Intel provide memory for the Bluetooth and GSM portions, respectively.The Seiko LCD driver is the largest IC in the T68 (measured as unpackaged silicon). White-LED sidelighting is used to good effect, but the T68 lacks the visual punch of some color screens we've seen.

The component packaging emphasizes miniaturization. The cellular power amp and Bluetooth radio designs are both implemented with space-efficient surface-mount modules, and major IC components are housed in diminutive chip-scale packages, most of which are epoxy-underfilled for enhanced solder joint reliability. By minimizing component count and packaging-related overhead, the T68's display, keypad and battery define the minimum form factor for a handset.

In keeping with an objective of pocketable design, internal antennas are used for both cellular and Bluetooth radios The antenna array is based on a physically simple copper-conductor applique tucked into the handset housing's plastics. Separate applique traces support GSM bands and the Bluetooth radio.

By our estimates, Bluetooth and the color display add $30 to $40 to the typical $80 GSM handset hardware cost-of-goods sold, for a $120 (or so) total phone manufacturing cost. With retail for the T68 well north of $400, the profit potential of feature-infused handsets seems clear. Whether users upgrade will depend on technology advancements, carrier service offerings and economics.

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DAVID CAREY IS CEO OF PORTELLIGENT (AUSTIN, TEXAS; WWW.PORTELLIGENT.COM), WHICH DOES TEARDOWN REPORTS ON PORTABLE ELECTRONIC SYSTEMS.