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MediaTek’s Next Target: The United States and Qualcomm

January 24, 2015 - Written By Phil Bourget

The United States is a rough market to enter, for hardware manufacturers like Xiaomi and Lenovo have found.  But it’s even harder for the Taiwan-based silicon manufacturer MediaTek.  If you recognize the name, it’s probably because they manufacture most of the processors for the low- and middle-tier smartphones running around China and most of the Asian continent.  There are the Xiaomi and Meizu phones that utilize Qualcomm and Samsung processors to get going, but MediaTek may be on the move in a big way.  The name is also attached strongly to the Android One program which launched last year in India, providing budget-friendly smartphones to people using MediaTek’s silicon.  But why MediaTek, and why now?

CES has recently concluded, and some of us might still be in a tech-based stupor from all the news and hype coming into and out of the tech fanatic’s dream.  One thing to take away from it, that you might not have known, is that MediaTek has opened an office in San Diego, California.  And if the city sounds familiar, it’s where Qualcomm and its Snapdragon family of processors come from.  this could spell disaster for the Taiwanese company, gut they have a reason for the bold move.

The trend in the United States has become increasingly installment-based phone purchasing, instead of the previous subsidized methods of bygone years.  The point of bringing this obvious point up though is that phones are expensive, and people are now more than well-aware of it.  The Galaxy Note 4 costs $700 and more to get using installment plans (once all installments are paid out and you completely ‘own’ the device), the iPhone 6 costs a minimum of $650, and those are the popular ones that will sell best.  And with phones becoming obviously expensive, people might be working towards the less expensive realm of great phones, and that’s where MediaTek looks to step in.

Samsung Exynos processors are hardly used in the United States, mainly due to the general lack of U.S LTE-compatibility within the chips, so they haven’t existed here since and except for the Galaxy Note II.  And Qualcomm’s Snapdragon processors are plain expensive, and have been for years, and likely will stay that way for the foreseeable future.  MediaTek, however, makes its chips affordable for hardware manufacturers to purchase, because that’s part of their business model.  The company that has helped to make MediaTek a name in the U.S. is one by the name of BLU Products, makers of affordable Android and Windows Phone smartphones that are based out of Miami, Florida.  The biggest thing that MediaTek has going for them is that they have the low prices that some manufacturers might want or need to make a profit on their device(s).

The next time you want to buy a budget-minded smartphone in the U.S., you might find the spec sheet missing ‘Snapdragon’, and instead produly reading ‘MediaTek’.  It’ll be hard for sure to uproot Qualcomm’s strong grip on the U.S. market and its devices, but MediaTek has the potential to make themselves known in big ways,  perhaps by the name of Lenovo, Alcatel, and BLU or many new companies looking to sell to U.S. customers without shelling out for Snapdragons.  Have you ever used a MediaTek-powered phone?  Do you think that the U.S. market would accept another processor manufacturer, especially when it undermines the home team from San Diego?  How much does the processor and its manufacturer matter to you when you’re buying a phone?  Would the lower price of a MediaTek-powered phone sway you towards the idea, or does the name sell the phone like with Apple and Samsung?  Let us know down below.