MediaTek to focus more on western markets as it targets Qualcomm

February 23, 2014 5:49 pm

MediaTek to focus more on western markets as it targets Qualcomm

By Daniel Thomas in London

MediaTek will focus more on western markets and on the fastest growing tier of the smartphone market, which the Taiwanese chipmaker hopes will erode the dominance of US rival Qualcomm.

MediaTek, which is second to Qualcomm in the mobile phone market, unveiled its latest range of next generation processors able to use 4G, or LTE, networks at Mobile World Congress in Barcelona on Sunday.

David Ku, finance director for MediaTek, said that the company aimed to move away from its traditional “cheaper feature phone business” which would position them directly against Qualcomm.

“We are not number one yet but MediaTek and Qualcomm have similar if not the same addressable market,” he said, pointing to smartphone revenues at the Taiwanese group that were a fifth of its US rival. “This shows a very good opportunity. The revenue gap should not be five times.”

MediaTek still makes chips mainly for Asian handset makers such as LenovoZTE, Coolpad and Xiaomi, which are growing fast as emerging markets embrace cheaper smartphones as a primary means of internet access.

However, the Taiwanese company now wants to become more established in western markets, and recently opened an office in San Diego, California, that will employ 150 people. Qualcomm is also based in the city.

“We are looking for more revenue outside China,” Mr Ku said. “Before we were business to business, and not a household name . . . but we need to go global and outside the emerging markets.”

It is not just about iPhones. It’s about providing for everybody. Not just innovation for features but making it accessible. The top end of the market is moving down and the bottom moving up

– Johan Lodenius, MediaTek

MediaTek wants to make smartphones more affordable with its range of technologically advanced chips that are cheaper than those produced by rivals such as Qualcomm. Mr Ku said that MediaTek was “monitoring” opportunities to develop for Windows phones but had no plans for any components suitable for Apple’s iOS.

“This is rebranding of the company in what we call the ‘super-mid market’ for smartphones, which makes up the majority of the world’s devices,” added Johan Lodenius, chief marketing officer for MediaTek. “We are going after the 4G market in a big way.

“It is not just about iPhones. It’s about providing for everybody. Not just innovation for features but making it accessible. The top end of the market is moving down and the bottom moving up.”

Mr Lodenius added that the move for cheaper components would not affect margins however, which has been a worry for analysts.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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