MediaTek is Expanding To U.S.
Asian chip maker MediaTek has decided to gear up for the U.S. as the company looks to expand its business globally. The company develops processor chips for smartphones, usually those that are used in budget smartphones. In fact, these chips are the sole reason why most of the budget phones out there, like Xiaomi Redmi and Huawei Honor 3C, are.. budget phones.
They are already popular in Asian markets. Most of the emerging Chinese smartphone makers like Xiaomi, Huawei, Oppo, and ZTE are using MediaTek chips to power their phones and keep the prices low.
The Taiwan-based chip maker usually focuses on mid-level and low-level smartphones, but it doesn’t mean they do not manufacture high-end chips. They are working on an octacore processor — MediaTek MT6595 — with which they hope to compete with the likes of Samsung Exynos chipsets. It will be world’s first 4G LTE octacore processor SOC for smartphones.
MediaTek’s Expansion to the U.S.
MediaTek’s President Ching-Jiang Hsieh hinted about the company’s plan to expand to the U.S. at CES 2015. Why U.S.? The first reason is obvious: U.S. is one of the main markets for all sorts of gadgets, and this is the target market of top players like Apple and Samsung.
But the second reason is interesting. Most of the flagship phones currently present in the market from Apple, Samsung and others are being offered at a very high price point as compared to what they are offering in terms of compute power and other specs. MediaTek wants to avail this opportunity to its advantage by offering low-cost flagship phones.
You might have felt weird while reading the phrase “low-cost flagship phones” as the term flagship automatically means that the phone would likely be worth more than $400 (keeping $300 OnePlus One an exception). MediaTek wants to transform this mentality by making “low-cost flagship phone” a reality.
They are excited to avail this opportunity that lies in U.S. market. They have already struck deals with T-mobile, and are looking to get certifications from AT&T and Verizon as well.
Qualcomm says Hi!
Qualcomm is currently the most widely adopted chip maker, and is the biggest rival for MediaTek. Qualcomm’s chips are powering some of the top smartphones currently found in the market, including Samsung Galaxy S5, OnePlus One, and Galaxy Note 4. Even Apple uses a blend of Qualcomm and its own chips for iPhones.
Moreover, Qualcomm has also got some strategies up its sleeves. It has begun to produce more low-cost chip sets to facilitate its growth in Asian markets.
So MediaTek needs to devise a strategy to win this battle against Qualcomm. In fact, they are already working on a strategy. The company increased R&D department funds from 8% in 2006 to 19% in 2013 to produce chips that come on par with Qualcomm chips.
We are going to see a fierce competition between the two companies, and the outcome is going to favor the consumers because they will be getting affordable smartphones as a result of this strong competition.