BOSTON (CNN/Money) - The word heading into Texas Instruments's fourth-quarter earnings call last night was "innovation." The company finally unveiled its single-chip mobile-phone microprocessor on Monday -- an innovation it first announced almost two and a half years ago.

Investors considering taking up a position with TI may want to wait a few more hours, however. At 1 a.m. EST tomorrow, Nokia -- TI's biggest customer -- will report its fourth-quarter earnings. Then we'll be able to get some guidance on how the high end of the cell-phone market is doing.

The real action for Texas Instruments -- where the company makes the majority of its revenue -- is in mobile phones.

TI's engineering coup of replacing several chips with one semiconductor puts it in a strong position because low-cost, midfunctional mobile phones are in high demand in places like Russia, Latin America, and parts of Asia. TI's single chip is very attractive to makers such as Samsung, with whom TI just signed a supplier agreement, because it lowers their component costs and improves their margins in these markets.

Qualcomm is also making a single chip for phones, but analysts think it won't hit the market until a year after TI's, giving Texas Instruments a significant head start.

"The emerging market is absolutely where the growth is right now," says Kevin Burden, an analyst with IDC. He projects that 703 million mobile phones will be sold worldwide in 2005, up 8 percent from 2004. That's not a boffo growth rate, but the emerging markets -- where TI's new chip will play -- are growing much faster.

Meanwhile, thanks to its partnership with Nokia, TI is well positioned for the high end of the mobile-phone market.

"TI is not just a unit volume play," says William C. Conroy, an analyst with Sanders Morris Harris. "It's content within the cell phone. As you move beyond voice, the phone requires more applications processors. That's good for TI. It increases their dollars of silicon per handset."

If TI went from selling $5 to $10 worth of chips in each cell phone to selling $15 to $30 worth, Conroy says, the company would show strong growth even in a market with flat unit growth. Conroy has a "buy" rating on the stock and says he holds a small number of shares in the company.

Despite that positive news, Texas Instruments still has a fundamental problem. As its declining stock price indicates (down more than 30 percent in the past year, currently hovering near its 52-week low), it is getting hammered along with the other semiconductor makers.

In fact, it's getting hammered more. TI trades at a trailing price/earnings ratio of almost 20, which is significantly cheaper than the industry average of 25. How will it get credit for its efforts?

TI is attempting to avoid the blows in a manner befitting an engineering-led company: It wants to innovate itself out of the market doldrums. The single chip for phones is viewed by many as a good way to give TI luster.

I sat down with Texas Instruments CEO Rich Templeton a little more than a year ago -- he was COO at the time -- to talk about the company's engineering efforts, the semiconductor downturn, and the single-chip plan.

"[Chip] integration is a classic approach for us," he said. "The more we can put on fewer chips, the better."

But what's surprising about Texas Instruments today, and what puts it in such a promising position, is that not only is it attempting to engineer itself out of a downturn, it's also trying to use marketing -- a novel approach for such a famously sober company -- to bolster its prospects in the hot high-end television market.

Thomas Mucha, a columnist at Business2.0.com, wrote an excellent piece this week that outlines the challenges facing TI as it goes up against plasma and LCD screens with its digital light processing technology.

Right now the company's DLP division accounts for only about 5 percent of its revenue. But the high-end TV market is still up for grabs, which means that a big marketing push today could pay off handsomely later on.

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