Recent evidence (Maye, Werker & Gerken, 2002) suggests that statistical learning may be an important mechanism for the acquisition of phonetic categories in the infant's native language. We examined the sufficiency of this hypothesis and its implications for development by implementing a statistical learning mechanism in a computational model based on a mixture of Gaussians (MOG) architecture. Statistical learning alone was found to be insufficient for phonetic category learning--an additional competition mechanism was required in order for the categories in the input to be successfully learnt. When competition was added to the MOG architecture, this class of models successfully accounted for developmental enhancement and loss of sensitivity to phonetic contrasts. Moreover, the MOG with competition model was used to explore a potentially important distributional property of early speech categories--sparseness--in which portions of the space between phonetic categories are unmapped. Sparseness was found in all successful models and quickly emerged during development even when the initial parameters favoured continuous representations with no gaps. The implications of these models for phonetic category learning in infants are discussed.