Feeling the heat, MediaTek seeks a comeback
12/20/2010 10:37 AM EST
Looking for new markets
Whether or not MediaTek regains lost market share in China, the company is clearly trying to strengthen its position in other areas. The study praises MediaTek’s aggressiveness in forming partnerships and for its acquisitions. One significant deal was 2008’s $350 million acquisition of Analog Devices Inc.’s baseband chip product lines, which not only strengthened MediaTek’s product line but also gave the company access to tier 1 handset makers.
The report notes that MediaTek has also made inroads in North America; its chips have been designed into Garmin GPS units and Vizio digital TVs. Those design wins have helped change the industry’s perception of MediaTek. Well-known handset vendors such as Samsung, LG, Motorola and Nokia have used the company’s technology in some of their low-end handsets, drawn by price, time-to-market and quality, according to the report, which concludes that growing numbers of tier 1 companies will likely consider MediaTek a viable supply option going forward.
Still, making the leap from low-end cellular chips to sophisticated smartphones operating on more-advanced networks remains a tall order. "Right now, they are struggling to make a dent in the 3G market," Strauss says.
The July deal with Docomo gave MediaTek access to LTE technology that it will integrate with its 2G and 3G lineup to provide chips for Japan and other markets. A spokeswoman for MediaTek claims the deal demonstrates the richness of its wireless communications product portfolio. In addition, MediaTek says it is set to roll out an HSPA solution early next year, and its MT6268 W-CDMA chip was recently certified by U.K. handset vendors Vodafone and Orange. MediaTek this year added the MT6516, a smartphone IC with a 600- to 700-MHz multimedia engine that runs the Android platform, according to the TechInsights report.
One area in which MediaTek has yet to show strength, Holstead says, is the design of combo chips that integrate a baseband processor with an RF transceiver and peripheral support. But that may be changing.
Holstead adds that MediaTek’s MT6253 single-chip multimedia GSM/GPRS solution—the first device he has seen with baseband, RF and power management on one chip—could make a splash in the wireless market. The MT6253 was announced in February 2009, but reports surfaced that MediaTek was plagued by production delays. So far, UBM TechInsights has only found the device in one teardown.
MediaTek, however, says the MT6253 has been adopted in China and by global Tier 1 manufacturers. It claims the product has been incorporated into devices shipped to more than 20 countries, including major local brands in several Asian countries. MT6253 shipments currently represent more than 30 percent of its monthly shipment volume MediaTek says.
That the company has so many balls in the air at one time illustrates its ambition. Ultimately, however, the comparisons with Qualcomm stretch only so far. As Strauss notes, Qualcomm is usually the first to market with new technologies, while MediaTek’s strength has been as a fast follower with inexpensive silicon and a turnkey, customizable solution. Despite cutthroat competition and declining sales, that combination—along with the company’s high-touch, direct sales model—should enable MediaTek to retain a strong position in China and sustain growth in other emerging markets.
But with very little in the way of compelling core technology, MediaTek’s pursuit of sockets in higher-priced feature phones and smartphones from Tier 1 vendors will be an uphill climb.