MediaTek to focus more on western markets as it targets Qualcomm
February 27, 2014 Leave a comment
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 Lenovo, ZTE, 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.
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