Suppliers of chips to smartphone makers are helping customers buy other phone components such as speakers and camera lenses in a bid to win more business.
According to Reuters chipmakers like Qualcomm and MediaTek are saving phone makers the expense of finding and testing, for instance, the speakers and camera lenses that get the most out of their audio and photography chips.
David Tokunaga, a senior director in product management at Qualcomm, told Reuters Qualcomm used to just offer the chips and the manufacturer would do the whole device. "Now we offer a whole hardware ecosystem that makes it very easy for customers to just plug and play what they want."
Offering chips, hardware and even the phone design helped Taiwan's MediaTek capture half of the Chinese market for smartphone chips, according to one analyst. In that market, handsets priced under $150 accounted for almost 70 percent of all smartphones sold in the first quarter of this year.
"MediaTek gets all the components ready for clients so that all the manufacturers have to do is put the phone together.
Qualcomm has started mimicking high-end features. It has developed audio technology one Qualcomm executive dubbed the "poor man's Dolby", to sidestep the cost of licensing a pricey equivalent.