Asian Chip maker Mediatek, which is quite rightly the sole reason why you are enjoying that budget Android smartphone in your hand, is now gearing up to set foot in the US market.
They are already a big deal in the Asian market. They even have an Octacore processor lined up to compete with the likes of Samsung’s Exynos chipsets. The MediaTek MT6595 is World’s First 4G LTE Octacore processor SOC for smartphones. This makes it obvious that this company means business.
The mindset of a basic smartphone consumer today is that “the costlier the phone, the better it is”.
MediaTek wants to transform this mindset and make everybody realise that a smartphone can be in your budget and worthy enough to be pitted against those high end products out there.
The Taiwan-based chip makers are a big deal in the Chinese smartphone market presently with their chipsets powering phones like Xiomi, Oppo and ZTE. They are making chipsets for almost all ranges of smartphones, hence trying to diversify into the Chip making business itself.
The company has been in the smartphone market for about 10 years and their revenues are mostly from Asia, making it clear that they need to get out if they want a chance to compete globally. Their revenues for the last quarter have been at a 47% rise at around $1.8 billion. These numbers tell the tale themselves.
The company focuses on making chips for mid level and low level smartphones which is their obvious forte. With the smartphone companies’ expansion, The chip maker wants to expand too. The move to expand is an obvious and a smart one for a company that has been in existence for the better part of two decades.
The Expansion Plans
MediaTek President Ching-Jiang Hsieh said in an interview at this year’s CES,
If you intend to be the most global [player] in the mobile business you should be selling a chip in North America.
The statement is true to it’s core as the USA is one of the main markets for all sorts of gadgets and this is the market that the behemoth companies like Apple and Samsung target.
MediaTek is the new player that wants to do business in the American market and knows that the flagship of a typical big shot company like Apple or Samsung costs way more than what they are asking for their products.
The folks at MediaTek are excited to enter this new market and have already bagged the certification from T-mobile and are looking for AT&T and Verizon’s certifications. With the certifications from these 3 carriers, MediaTek will compete head to head with the best there is.
You can change or abandon your carrier at anytime in the USA now. This means that people can and are preferring to buy phones at their actual price. This makes it easier to switch between carriers. The basic iPhone these days costs more than 500$. The biggest advantage here goes to companies like MediaTek that provide phones with much less asking price and almost the same features. They may have a rather easy time winning that battle.
The Qualcomm factor
It’s not possible to expand and not have rivals at the same time. Qualcomm is MediaTek’s biggest and most fierce rival right now. Actually, Qualcomm is anybody’s biggest rival. This comes from the fact that it makes chipsets for Samsung and even Apple uses a blend of Qualcomm and it’s own chips for making the iPhones.
MediaTek knows that it’s chipsets are years behind Qualcomm’s right now. This is why the have bumped up their R&D department funds from 8% in 2006 to 19% in 2013. They want to go against the best and they know that they need to step up their game.
Replacing Qulacomm in the US market is a certain challenge but it’s no reason not to try. Microsoft’s Lumia 532 and Lumia 435 are both priced under 100$. This is an added competition for both MediaTek and Qualcomm.
It is only fair that Qualcomm comes to MediaTek’s base market if they are trying to capture Qualcomm’s base. Qualcomm has started to make more low end chip sets to facilitate their growth in the Asian markets. Qualcomm’s officials are quite confident about their reach with the low end smartphones though. They are sure that their mid level products will provide good audio and video quality with a faster battery charging capability and a long lasting battery life too.
MediaTek rubbished the claims that reported the start of a partnership with Intel while Intel declined to comment.
The next few years are obviously going to be important for MediaTek’s future as they try to establish themselves in a new market while maintaining their monopoly in their present market. The recipe for MediaTek’s sustainment is not known but let’s see if it’s fruitful for the company or not. Either ways, we’ll see better performing and affordable smartphones in most parts of the world in the next few years due to the fierce competition between these companies.