Philips subsidiary NXP Semiconductors announced a reference design for a $100 Linux mobile phone this morning.

The 3G flip phone runs a Linux distribution from Purple Labs and supports video chat, music, Web browsing and streaming media. Inside lives an ARM 926 processor, officials said.

The handset is designed for entry-level markets such as Southeast Asia, Eastern Europe and Latin America, but also could be picked up by Western carriers.  NXP said the $100 designation is a “transfer” price, meaning the starting price for carriers. It could easily be positioned as free for consumers when they purchase a contract, Eindhoven, Netherlands-based Purple Labs said.

This phone is the first from the 1-year-old NXP – Purple Labs partnership, and it could be in stores by the third quarter of this year. The companies are currently seeking a manufacturer, but the reference design will be on display at the Mobile World Congress in Barcelona.