MediaTek App Store to Serve Chinese Mass Market

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MediaTek has started shipping a new generation of its widely used mobile phone chips with support for an application download store that will first target China's masses of mobile subscribers, the store developer said Tuesday.

Chips from Taiwan-based MediaTek already power most mobile phones in China. The download store, now available only with the new MediaTek chips, is planned to launch outside China later as well, said Luo Tianbo, vice president of business development at Vogins, the middleware vendor that developed the platform.

Handset makers, mobile carriers and other companies have announced plans for similar download stores as a way to lure users and boost revenue. Apple's App Store may launch in China when the iPhone formally goes on sale in the country this year, and China's three mobile carriers are all developing download stores.

The MediaTek download platform will compete for phone buyers' attention with Apple's App Store and the three mobile carriers' stores. While the App Store may face regulatory obstacles and China Mobile's store, launched last month, has yet to take off, phones that support the MediaTek store could pour quickly into the hands of Chinese users. China has a huge market for mobile phones and services with over 700 million mobile subscribers, and MediaTek holds over a 50 percent share of China's handset chip market, according to BNP Paribas.

The MediaTek store will not "absolutely" compete against the download stores from China's carriers, said Luo. MediaTek is in talks with China Mobile, China Unicom and China Telecom about altering the Vogins platform to support their stores as well, he said.

MediaTek began including support for the application download platform in its chipset packages for mobile phone manufacturers last month, and handsets that support it will go on sale in China around November, Luo said. The Vogins store currently has about 100 free or paid applications made by third-party developers, mostly games but also including other content such as e-books, he said. Vogins, which is majority-held by MediaTek, aims to reach at least 400 to 500 applications by the end of next year. One hugely popular program it may soon offer is a client for the QQ chat service, owned by Chinese portal Tencent, said Luo.

The application store can be accessed from a software platform MediaTek modified from the Nucleus kernel, said Luo. Nucleus is a real-time operating system designed by Mentor Graphics for use mainly on embedded devices.

The retail price for handsets that support the MediaTek store could reach as low as US$100, partly because the company is using its own OS, JP Morgan predicted in a recent research note. A further boost for the store in China could come from its stock of local applications, JP Morgan said.

"We think MediaTek is in a strong position to build a far bigger set of China-specific applications than any other vendor," the note said.

MediaTek did not immediately reply to a request for comment.

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