Will Strauss, the leading American telecoms analyst, reckons MediaTek is climbing the wireless chip-set food chain on the way to becoming the third largest supplier of ICs to the wireless hand-set market.
"MediaTek supplies almost complete chipset solutions to its OEM customers, including its own baseband and RF transceiver chips but also supporting chips from other vendors (e.g., Skyworks' PA chips)", writes Strauss in the latest (December 1st) edition of his Wireless/DSP newsletter, "this makes it very easy for unsophisticated white box handset vendors to, in essence, wrap plastic around the chipset and add their individual brand labels."
Strauss adds: "MediaTek will be in volume production of monolithic GSM/GPRS chips (MT6253) this month. Placing RF transceivers on the same die with (RF-generating) baseband chips is not an easy task."
"MediaTek has also announced adoption of extended depth of field (EDoF)-enabled CMOS image sensors for its 3G handset IC chip sets," concludes Strauss, "offering a cheaper solution than traditional auto-focus techniques."
Meanwhile further additions to the MediaTek duscussion have come in from Tai-Pan and Robert:
MediaTek was probably more aware of what the local Chinese market could accept in terms of quality and experience. If it looks like an iPhone, has 40% of the iPhone functionality then there is a huge market for a much cheaper Chi-Fauxne :)
The Chinese want their brands and culturally its no stigma to support your favorite brand (clothes, cars, phones... whatever) with a knock off. It still says... "I like Apple" Tai-Pan www.shanzai.com."
Robert writes: "I have to agree with Tai-pan, TI and the other big boys simply didn't have a clue how to deal with the shanzai, and were only marginally successful with ZTE and Huawei.
At last estimate there are about 200, that's right two hundred companies in
TI or ST expects the phone maker will behave like Nokia, Motorola or Sony/Ericson and will want to port their software to your phone hardware, so they can run their stack and HDI (to differentiate their product)
Consequently TI only provides the basic functionality in a reference design. Mediatek reference designs however, are production ready, and field proven / debugged and cost minimized solutions. Most shanzai use Mediatek reference designs "as-is" the ONLY change is the start-up screen where they add their logo, or more often Nokia's logo.
There are other things like multimedia, bluetooth file transfer (song/video swapping), and touch screens (with Chinese character recognition) all essential entry level phones in
From what I heard, TI didn't even support BT song swapping, I guess they are concerned with RIAA/MPAA. TI also wanted to sell OMAP/Davinci as a $10 multimedia add on to Locosto. They wanted to keep the multimedia phone differentiated from the basic phone, and bye the way figuring out how to incorporate a touch screen controller was your problem.
Anyway, as I have said before, what you are seeing is part of the big revenue transfer from the old guard to the new entrants, with a new business model. NXP's home business unit was made worthless by Mediatek's big wins in the HDTV space (hence the sale to Trident for pennies). I'm guessing the ST/NXP/Ericson GSM venture is also not worth what ST paid NXP for it."
While Digitimes reported yesterday:
'MediaTek has started shipping chips to Taiwan OEMs making handsets for Motorola, while Samsung Electronics is considering adopting the designer's GSM/GPRS single-chip solution MT6253 to replace Infineon's single chips, according to industry sources.'
The presence of 200 Chinese companies trying to get into a hot market has echoes to me of the DVD player story of a few years back. Lots of Chinese companies started to build cheap DVD players using reference designs (and little differentiation) and soon the world was glutted with the players. (I think the cheapest retail price I saw was £17 in the UK or $29 in Walmart in the US).
The margin on the complete boxes was apparently something like a dollar. Cue a round of bankruptcies and mergers, and loads of stock making its way onto the market extremely cheap. It will be interesting to see how quickly this pattern is repeated with these handset makers, and what happens to the market afterwards once prices have been reset at such a low level. Maybe some of them will have the sense to get into the M2M market?
Luke that's a great account and very apposite. Is M2M for real? I thought it was bollox like Cloud computing.
Don't you know nuffink, David? M2M is the future! At least this week it is...
Thanks Luke, I'll just have to try harder to keep up
Luke
£17? What a rip off - the cheapest I heard was ADSA selling DVD player for £9...
It is staggering isn't it, when you think of the complexity: silicon, lasers, precision mechanicals etc
But isn't it brilliant that phones will be so affordable. Not necessarily for us in rich countries, but having a handset makes a huge impact on income in poor countries. Things like wireless money in Kenya, or a farmer negotiating a good price for cattle.
If Mediatek can help make that happen, they may do more to improve world situation than most companies...
Spot on, El Rupester, you could hardly be more spot on. According to World Bank research every ten per cent increase in broadband penetration delivers a 1.2% increase of a country's GDP. And the way broadband penetration is happening is increasingly by wireless connections.
In North America broadband penetration is 73.9%, in Oceania/Australia it's 60%, in Europe 50%, in Latin America and the Caribbean 30%, in the Middle East 23.7%, in Asia 18.5%, in Africa 6.7%.
Next year mobile broadband subscribers will overtake fixed line broadband suppliers, according to Alain Dutheil, former CEO of ST-Ericsson and now COO of STMicroelectronics, and by 2014 two thirds of broadband subscribers will be mobile users.
So there's an absolutely direct correlation between having a cellphone and increasing the wealth of a country. Good old Chinese handset makers - long may they thrive.
One thing you haven't mentioned is that to even get datasheets for mobile chipsets from TI or STM requires you to sign up in blood. I suspect some of the Chinese companies did try to get some information on their offerings and failed at the first hurdle.