MediaTek: How They Came To Take on Qualcomm?

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• published: 15 Jul 2014
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When I found out about the MediaTek press conference, I immediately picked up a ticket and planned to spend a few days in one of my favorite cities on earth, Shenzhen. MediaTek is one of the fastet growing companies in mobile. But where exactly did this Taiwanese company come from? Back in 1997 MediaTek was spun off from United Micro Electronics Corporation which was Taiwan's first semi conductor company back in 1980 and started out making chipsets for home entertainment centers and optical drives. In 2004 they entered the mobile phone market with a different approach, instead of just selling SoCs they sold complete packages, a chip with an operating system all ready baked on, they were selling reference designs. This cut entire heavily manned teams out of the process and more importantly reduced barriers for entry, small companies sold phones under their own brand. This is why most people have never heard of MediaTek, they merely enabled the success of others. Particularly in emerging markets like China. With Feature phones peaking in 2012 and Smartphones finally taking over the top spot in 2013, they had to move on, it took them longer then they should have, regardless, they are here now. MediaTek is applying the same strategy for dominating the Feature Phone market to low and mid range Smartphones. They are already in bed with all the significant emerging market players like ZTE, Huawei & Alcatel. And getting manufacturers on your side works for gaining market share when carriers don't have much control. Unsubsidized handsets make people purchase more affordable devices. Despite its enormous success in the category where the next Billion handsets are going to be sold, they have yet to make a name for themselves in the West. Fair enough, being known for cheap handsets will create challengers to entering the high end market. But that hasn't stopped them from coming out with the world first 4G LTE Octa core processor. And they even set up shop in Qualcomm's backyard by opening an office in San Deigo. Which is a pretty big statement, especially when you take into consideration that MediaTek is bigger than Broadcom & Nvidia. But as they push into the US, Qualcomm seeks to gain a foothold in China. So let's take a closer look at that because this race has less to do with SoC's than it does with LTE. MediaTek's Octa-core processor with LTE put Qualcomm on alert because they always had to lead when it came to LTE. I found some stats on Android Authority from Strategy Analytics in Q3 2013 66% of their cellular revenue came from LTE, which MediaTek claimed second place at 12%, and Intel in third with 7%. Qualcomm even has a realtionship with China Mobile to get their LTE devices into the hands of its local market. Even still, it is a numbers game and if MediaTek's SoC performance is at the same level as Qualcomm's mid range SoC offering but at a lower price, it won't take MediaTek to catch up. But even on a more base level, let me tell you about a meeting that I had in Shenzhen with Gionee I asked about developing on Qualcomm vs MediaTek. They said, MediaTek will get back to you within the hour, Qualcomm will get back to you the next day, and when I mentioned Intel they just laughed. Consumers might find it frustrating that MediaTek takes a little longer to come out with the latest version of Android, but the reason is that they are doing all the work for their partners. When you're competing with a company that understand customer service better than anyone else right now, it's going to be hard not to see them as a real threat.