MediaTek has unveiled its biggest bid yet to move beyond its low cost baseband market and attack the smartphone. The Taiwanese firm has announced a dual-core platform, the MT6577, which promises to enable high end smartphone features on devices priced between $150 and $200.
The platform runs on a dual-core 1GHz ARM applications processor, the Cortex-A9, combined with MediaTek’s 3G/HSPA modem. It also has a graphics processing unit based on Imagination Technologies’ PowerVR Series5 SGX and supports Android 4.0. The offering supports many multimedia features usually found on $500-plus smartphones, a move that MediaTek claims will shift the balance of power in the market next year.
For instance, the platform enables an 8-megapixel camera, stereo 3D camera, up to 1080p 30 frames per second/15 frames per second video playback and record capability, and 1280 x 720 HD display (like the Samsung Galaxy SIII). No bridge or support chip is needed to support features like a 3D camera.
The MT6577, manufactured in 40nm process technology at TSMC, is already in active design-in with lead customers, Finbarr Moynihan, director of business development in north America and western Europe, told EETimes. ‘First models using the MT6577 will emerge in the third quarter of this year.’
The chipmaker is clearly looking to expand from its traditional base among the low cost Chinese and Taiwanese handset makers, into the big names, taking on Qualcomm and others. MediaTek is the world’s largest baseband maker by volume, though not revenue, reflecting its low cost approach, but it has been struggling to maintain that market share against other Asian rivals, and to boost its margins. By combining dual ARM cores and an HSPA modem on one die, it is going straight for market leader Qualcomm.
MediaTek is tapping into the biggest unit growth area in the smartphone segment, the midrange to entry level models, where 45% CAGR is forecast over the next five years, according to Strategy Analytics. It sees its lowest hanging fruit as the Chinese market, which will grow rapidly from this year and where consumers are looking for affordable, but web-rich, handsets.
The MT6577 is pin-to-pin compatible with the firm’s current single-core devices, so that handset vendors can deploy the new dual-core device on the same footprint.
China will be particularly important, and MediaTek’s existing strength among regional vendors will be important as those OEMs also seek to go up the food chain. As well as the big Chinese and international brands, many other players are chasing the affordable smartphone sector. Internet players like Alibaba and Baidu are offering own-brand handsets and there are 12 or more branded but low cost local device sellers, including Coolpad, Koobee and Great.
But a low bill of materials will be essential in such a competitive space. “There are too many new entrants in the low end segment, and competition is getting more and more intense,” said Nicolas Baratte, head of technology research at Chinese analyst firm CLSA.
Smartphones priced between CNY700 ($110) and CNY1,500 ($230) accounted for about 64% of the Chinese market in the first quarter of this year, compared with 45% less than a year ago, according to Analysys International. The percentage of smartphones priced between CNY1,500 and CNY2,000 has decreased to 14% from 22% over the same period. That has helped Huawei increase its market share in China’s overall smartphone market to 12.2% from 7.4% a year earlier, while ZTE’s share jumped to 10.6% from 3.6%.