Mediatek to dao “nest” of qualcomm, qualcomm to dig mediatek “ancestral graves”

cloud network hunting note: mediatek has now ruled China low-end (and even some flagship smartphone market, but its ambitions far more than that, also provide consumers with more affordable mobile phone, and become the global chip maker is its ultimate goal. When mediatek meet the world’s first qualcomm, what kind of sparkles between will be?

you have thought I a smartphone is what kind of? Mediatek hope to be able to reverse your ideas.

mediatek, the Taiwanese chipmaker now dominate the low-end smartphone market in China, but its ambitions far more than that, also provide consumers with more affordable mobile phone, and become the global chip maker is its ultimate goal. Last year, mediatek and Finland have set up offices in India, but for mediatek, it is the most important, the most challenging overseas target markets or the United States market. To break into the U.S. this market, mediatek opened offices in California, San Diego last year, it is worth mentioning that San Diego is also one of the world’s largest mobile chip maker qualcomm company headquarters is located.

at the beginning of last month on the international consumer electronics show in Las Vegas, mediatek’s executives said that they had to break into the American market deployment plan, he said, adding that if they can succeed in the north American market, so any other markets will not be a problem.

“if you want to become a leader in the field of mobile, so you should start from chip sales in North America.” Mediatek general manager xie qingjiang on CES an interview.

mediatek is second only to qualcomm’s second largest mobile chip maker, but in fact, it lags far behind qualcomm. Other chip manufacturers, including Intel from qualcomm has been trying to grab market share, but to little effect. If mediatek can succeed in qualcomm’s home market in the United States, then it will become a more powerful competitor, at the same time, it also can provide consumers with more affordable mobile phone options. However, in the process, mediatek has a long way to go.

now, high-end phones from apple and samsung accounted for most of the U.S. smartphone market, apple’s iPhone is mainly USES is apple, qualcomm chip, the samsung flagship device also has a large portion of the chip is qualcomm. Mediatek’s executives wireless operator marketing strategy from the United States saw an opportunity to change, from subsidies to the monthly instalments, this trend may expose the true cost of a smartphone, take the basic iPhone 6, it is priced at $650, but if the machine is only $199 contract, so that more consumers will consider the price lower.

the current customer demand for mid-range phones market growth has only just begun, but there are some smart phone manufacturers has been to make inroads in the market. Microsoft released earlier last month the company in 532 and the company 435 two phones, they are not in the price of machine is under $100. MOTOROLA’s Moto G cost less than $200, and such as zte and alcatel’s “rising star” also want to provide economical American consumers more choice.

however, mediatek visibility and visibility is very low in the United States. So far, it only obtained the t-mobile’s certification, also only some little-known American Mobile phone use its chips, such as alcatel OneTouch Fierce, Evolve, and Evolve. 2.

“the American market is an opportunity for them, but want to replace the qualcomm, it must be a huge challenge.” Gartner, a market research director Jon Erensen says, he thinks, in the smart phone manufacturers seeking alternatives, qualcomm mediatek should grasp the opportunity, may be on the open market.

however, mediatek’s progress has caught the attention of the Intel. There are rumours that Intel has been considering acquisitions mediatek to enhance their own competitiveness in mobile communication industry. Mediatek’s current market valuation of about $28 billion.

mediatek’s executives said has not had a deal with Intel, mediatek will continue to develop as an independent company. Intel declined to comment.

mediatek “raid” mobile market

in 1997, mediatek independence from umc, began to provide chip for digital TV, CD and DVD players, Google has become a fixed customer of the television and audio chip. About a decade ago, the company began to develop in the mobile devices. By helping millet, Oppo, alcatel (now TCL brand) and zte make high configuration of low-cost mobile phone maker, mediatek established a dominant position in the Chinese market, which is now the main business of the company.

the rise of these entry-level smartphone to a great extent, promote the development of mediatek business. In the fourth quarter of last year, the company’s income of about $1.8 billion, up 47% year on year, net profit year-on-year growth of 58%. Qualcomm, by contrast, the income of just $6.7 billion in the first quarter, year-on-year growth was only 3%, net profit growth of 26%.

because many Chinese handset makers are trying to expand overseas market, mediatek had the development opportunities with them. According to market research firm Morningstar report, although almost all of mediatek income comes from the Asian market, but it is in order to diversify, must expand to other markets.

mediatek is trying to get Verizon and AT& T these two U.S. wireless carriers, so that the smartphone mediatek chips can through the test of the United States is famous for its strict operators. Mediatek, head of the business development department Mohit Bhushan, said the company plans to launch at the end of this year or early next year aimed at the two operators of mobile devices.

“it is entirely within the scope of our ability,” he said, cancel the trend of the handset subsidies “to our advantage.”

although the price war is the only way to develop the market, but mediatek executives insist they will put more funds for research and development of higher quality chip, so that they have and qualcomm competition capital. Xie qingjiang said mediatek plans through long-term experience in the field of television to attract the attention of consumers, this experience will allow using mediatek chips cheap phones are expected to provide high-end video function.

but he also admitted, mediatek chips lags far behind the qualcomm, so to accelerate the process of research and development is still their top priority. The information provided according to Morningstar analyst Kai Bi, mediatek 2013 r&d spending accounts for 19% of its total sales, and this data is only 8% in 2006.

Erensen, an analyst at Gartner, said: “they are to solve the deficiency in their products, in order to more attractive in the market in the United States.”

qualcomm in the low-end market “snaps”

as mediatek is committed to research and development of higher quality chip in order to enter high-end equipment market, qualcomm wants more low-end products in research and development of emerging markets to challenge mediatek’s position. But from the current view, qualcomm has met challenges in the Chinese market, China’s long-term antitrust interrupted their original plan. Xie qingjiang said don’t worry about it, they have confidence in the low-end market with better price with higher quality products.

however, qualcomm products executives Raj Talluri have hold different views on this. “I think we definitely competitive,” he said referring to qualcomm low-end products, “we have seen a lot of good design, consumers will like our products.”

Talluri said, especially in the American market, consumers for what they buy smartphones have higher expectations, they want a longer battery life, more fast speed of charging, also want to enjoy and display top sound and video quality. Qualcomm is especially good at in this respect, he said, from high-end to low-end products can do great, not like some products although cheap but the quality is not so good.

“I think the user experience is the key to the mobile phone sales, and we in this crispy noodles research a lot of time.” Talluri said.

in the next few years will be mediatek critical period of development, it is not only to expand the market, other markets don’t give up. Bhushan said that American consumers will feel high configuration the rise of cheap mobile phones. “But this is not going to.” He said.