News & Analysis
MediaTek to bring premier smartphone features to $150 - $200 handsets
Junko Yoshida
6/27/2012 2:01 AM EDT
PARIS – Gunning for a growing market in mid- and entry-level smartphones, MediaTek Inc. (Hsinchu, Taiwan) is rolling out today a new dual-core mobile phone platform, dubbed MT6577, offering advanced multimedia features similar to those available on high-end smartphones such as Apple’s iPhones 4S.
The new platform, which combines a dual 1GHz Cortex-A9 application processor from ARM with MediaTek’s proven 3G/HSPA modem, features a PowerVR Series5 SGX graphics processing unit from Imagination Technologies, and runs the latest Android 4.0 “Ice Cream Sandwich” operating system.
For MediaTek, the MT6577’s mission is clear: Piling together the multimedia features available on today’s $600 smartphone to mid- to entry-level $150 - $200 smartphones , and thus changing global smartphone market dynamics in 2012 and 2013.
The MT6577, fabricated by using a 40nm process technology at Taiwan Semiconductor Manufacturing Co., is already in active design-in activities with lead customers, according to Finbarr Moynihan, director of business development, North America and Western Europe. “First models using the MT6577 will emerge in the third quarter of this year.”
Will Strauss, president of Forward Concepts, said, “Clearly, with dual Cortex-A9s and HSPA modem on the same die, its biggest competitor is Qualcomm.”
MediaTek already commands the number one position on the global mobile phone chip market, “in terms of volume [but not in revenue],” said Moynihan.
Forecasting a whopping 45 percent compound annual growth rate for mid- to entry-level smart phones over the next five years, Moynihan described the trend as the “democratization of smartphones.”
Global smarpthone sales by wholesale price tier (millions of units)

Red: Premium smartphones (>$300); Pink: High-end smartphones (>$191-$299); Light yellow: Mid-level smartphones ($100-$190); Green: Entry-level smartphones ($36-$99)
Source: Strategy Analytics
MediaTek plans to take advantage of the company’s existing, popular HSPA smartphone platforms – such as the MT6573 and MT6575. By making the new MT6577 a pin-to-pin compatible with the current single-core devices, handset vendors can simply drop in the new dual-core device on the same footprint in a system.
MediaTek’s new dual-core 1GHz Cortex-A9 CPU is designed to enable a host of high-performance multimedia subsystems. They include: 8-Megapixel camera; stereo 3-D camera; up to 1080p 30 frames per second/15 frames per second video playback and record capability; 1280 x 720 advanced display capabilities.
For example, if a handset vendor wants to create a smartphone with a stereo 3-D camera, the new MT6577 platform can offer the ability to support dual CMOS camera sensors “with almost no additional cost,” said Moynihan, as the MT6577 requires neither a bridge chip nor a support chip to enable that.
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prabhakar_deosthali
6/27/2012 9:45 AM EDT
What will happen to Apple's margins and its share of business if 4s compatible smart phone is available at may be 1/3 the price , is anybody's guess.
But this new chipset has to be adopted by a popular brand for it to create a tough competition to Apple
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junko.yoshida
6/27/2012 10:47 AM EDT
Indeed, it is going to be a threat. I found it interesting when MediaTek said that it took them seven quarters (since iPhone 4 launch) before they were able to roll out their previous mobile chip -- MT6575 -- offering feature sets equivalent to iPhone 4.
It took MediaTek only four quarters this time around to launch MT6577 -- which provides features that are on par with iPhone 4S.
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ippisl
6/27/2012 12:02 PM EDT
The price differnece is sow low that samsung will not have a choice but to go down to this prices, or HTC will eat their launch.
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eewiz
6/27/2012 1:29 PM EDT
IMHO Apple's margins and market share is totally safe from Mediatek's chipset. Apple's secret sauce is its software and they never compete on price/HW features. Its the droid phone vendors who should be worried abt this!. But most of them have already moved to the next node with quadcore+4g+
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wilber_xbox
6/27/2012 10:16 AM EDT
A smartphone, which is priced at 1/3 the normal highend smartphone price, loaded with features and decent working hardware is sure to be a hit. Normal price of mid-segment smartphone right now is between 300 - 400 USD.
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elctrnx_lyf
6/27/2012 2:53 PM EDT
This is a big challenge to the likes of Qualcomm, nvidia and TI also.
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ArthurCEvansIII
6/27/2012 7:57 PM EDT
I actually have a phone on a phone from a Chinese supplier and it is based on the MT6575. The phone is smoking fast. The big cellphone processors need to be concerned as this company is able to drive the market prices down. I only paid about $160 for the phone and have been happy since I got. This is my second phone from the same supplier in China and I have not been disappointed yet.
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konda
6/28/2012 2:57 AM EDT
Excellent! Tough competitor for Qualcomm.Any particular reason for Apple not to choose Mediatek as baseband supplier?
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plk
6/28/2012 8:51 AM EDT
Konda--yes, Apple wants the high end, which MediaTek decidedly is not. Maybe as a second source for cheaper models for emerging markets though.
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DataMuncher
6/29/2012 4:08 AM EDT
The apps processor and modem are only 10% of the BOM of a premium smartphone. Even if Mediatek gave their part away, there would still need to be many more component corners cut to reach a 160$ BOM, let alone a 160$ retail price.
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docdivakar
6/30/2012 8:48 PM EDT
@DataMuncher: valid point! It is easy to get carried away with announcement of one cheaper component when there are many others that influence the overall COGS. As some one also pointed out, there are differences in software, sensors and their fusion, analytics, that can give distinction in performance and hence price tag.
MP Divakar
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SarfrazAhmed
7/2/2012 10:55 AM EDT
Two costly components in high end smart phones BOM are camera-module and display. Then comes processor and sensors.
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BigBundy
7/24/2012 2:25 PM EDT
Beside the processor, the next costly component is the memory.
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