The breakdown of the carrier subsidy model is opening the mobile market to new local players, Mediatek has claimed.
Speaking to Mobile at the chip maker’s executive forum in London, Chet Babla, Mediatek’s senior director of corporate sales for EMEA, explained that for carriers the model is simply ‘costing too much’.
He said: ‘Local players are starting to flourish due to a few things that have happened such as the carrier subsidy model starting to break down. In the UK we’re working with Kazam and enabling these players to come forward.
‘The model is breaking down because it’s costing mobile companies too much. The devices cost too much to buy in, the carriers need to lock you in to a two year contract and still make money from services so if the devices can be cheaper that takes a lot of expenditure out of the picture.’
Babla explained that this breakdown is opening up new opportunities for Mediatek, claiming that its chip sets are being used by mobile carriers to take cost out of the equation. The chip company are currently working with networks EE and Vodafone, as well as companies such as HTC, Sony, and recently announced a partnership with Amazon.
Babla said that in the shift towards cheaper devices, user experience has become the main battleground for differentiation: ‘There are four phases of mobile; there’s utilities, then we had the connectivity phase with 3G and Blackberry epitomised that phase.
‘The third phase was desirability when Apple came into the market and now we’re at the point where it’s about user experience and that’s where our strategy lies.
‘This is where the battleground is in mobile today. That’s where we’re putting a lot of effort, differentiating the user experience and making it immersive. We keep breaking new ground. Yes it’s hard to differentiate but we’re looking at tricky areas such as battery life where there are real world problems that people may not have thought about in a different way.
‘When you look at the numbers the annual growth rate of smartphones is slowing down and so there is a bit of market pessimism in that sense but actually there’s still niche pockets where there is huge growth.’