Author(s): Raghu Gopal
These days, smartphones dominate the mobile landscape, but feature phones still find favour with customers. The cost, ease of use and nostalgia associated with these devices could help explain why many mobile subscribers worldwide still haven't migrated to smartphones. Regardless of the reason, even users of basic handsets expect robust cellular connectivity, and as 4G networks go up and 2G networks come down, the gap is growing between infrastructure and client equipment.
To address this, Qualcomm has announced its 205 Mobile Platform, a lower-cost 4G chipset intended to bring more feature phones and low-end smartphones onto LTE networks. The 205 system-on-chip includes support for Wi-Fi calling, high-definition video streaming, Bluetooth 4.1 and a provision for dual-SIM devices — a commonly demanded feature in developing markets.
Unlike Qualcomm's high-end chipsets, which can reach speeds of 1 Gbps on the latest 4G networks, the 205 platform supports just category 4 LTE, offering download speeds of up to 150 Mbps and uploads up to 50 Mbps. It caps camera support at three megapixels and display resolution is limited to 480 pixels.
Qualcomm is addressing both slowing smartphone growth and tougher component competition with its new low-end 4G solution. As Asian suppliers, namely MediaTek, dominate the chipset market for sub-entry devices, smartphone sales have been essentially flat year-on-year. The biggest volume opportunities are in countries where people's disposable income is considerably limited and in such markets feature phones still make up more than half of handset sales.
Qualcomm's push for entry-level LTE comes at a time when it expects both consumers and operators in developing markets to transition to LTE connectivity. Phone manufacturers are in need of an economic chipset solution capable of handling LTE to meet this demand. Qualcomm is maximizing its leadership in modems by addressing feature handsets, and in the process exerting further pressure on MediaTek. This follows recent steps to compete more keenly with the Taiwanese supplier in mid-tier and entry-level smartphones. As a result, MediaTek is being squeezed between Qualcomm and other Asian rivals such as Spreadtrum.
As capabilities such as Wi-Fi, voice-over LTE, and video calling become common in feature phones, the line between smart and basic devices will continue to blur. Qualcomm expects that even entry-level phone users will benefit from LTE connectivity, in the same way smartphone users have, providing a good first exposure to fast mobile broadband. Similarly, operators will benefit from the superior efficiency of LTE and scope for higher average revenue per user over time. Qualcomm will hope that both factors can justify subsidies that broaden the addressable market.
There's also a goodwill factor here. Bringing 4G and other advanced connectivity features to emerging regions can have a profound effect on local economies. In markets such as India and Southeast Asia, fast, reliable and secure access is needed to process financial transactions as commerce goes digital. Feature phones have batteries that last several days and the ability to charge less often is another advantage for people who may not always have access to a reliable power source.
Qualcomm has taken many of these real-world variables into account in designing its 205 Mobile Platform. The chipset should drive a market for a new category of devices, which are hybrids between smart and basic phones with smaller screens, simpler cameras, limited storage and memory, but with modern and increasingly capable modems.