'Dell-style' phones to challenge mobile operators

Mobile operators’ control over subscribers will increasingly come under threat as handset manufacturers move towards a “Dell-style” approach, where users specify the features and software they want on their devices, according to Norwegian VoIP provider, Telio.

“People know that subsidies don’t come for free,” Alan Duric, CEO of Telio told delegates at Informa Telecoms&Media’s Mobile Converged Devices conference in London. “So they’d rather buy a phone that costs £100 [€152] and choose the operator that suits them best.”

Informa owns Telecoms.com.

Around 40 per cent of Telio’s mobile customers buy their handsets independently of an operator subscription, he claimed. This trend is likely to grow as people demand features such as voice-over-wifi, which mobile operators may try to lock out.

Handset manufacturers, meanwhile, are keen to serve these people’s needs. “[Handset developers] pick up what’s best in the market, and if it doesn’t exist, they make it themselves until it becomes commoditised, and then they pick something else that’s missing [and develop it],” said Duric, describing the logic as similar to Dell’s computer-assembly process.

Handset manufacturer Motorola confirmed Duric’s position, predicting that the number of mobile phones sold directly to retailers or through an operator intermediary, rather than through operators, is going to increase “enormously”.

“The flexibility around the [handset] propositions that we’re offering needs to increase proportionally, because I think that’s where the innovation is going to come from,” said Alan Wright, head of strategy and new-business development at Motorola.