Why Qualcomm Should Worry About MediaTek’s New Moves?

MediaTek recently launched its Helio G90 and Helio G90T smartphone system-on-a-chip (SoCs), eyeing a growing affordable premium segment as well as the gaming smartphone market. Qualcomm has dominated the affordable premium segment for smartphones so far due to its technological advancements, providing comparable specification at an affordable price point, the G90 series from MediaTek is a strong competitor.

The new G90 series chipset will be a direct competition to Qualcomm’s Snapdragon 600 and 700 series chipsets competing for adoption by Chinese OEMs, especially in the US$250-US$500 price band or the affordable premium segment that constitutes nearly one-fifth of the total smartphone market.

MediaTek is already giving tough competition to Qualcomm in the low-to-mid-segment smartphone market. In fact, MediaTek’s performance in these price bands has meant that OEMs almost completely neglect Qualcomm’s Snapdragon 200 series.

The new G90 and G90T is already gaining traction among OEMs. Xiaomi has announced a gaming phone with the Helio G90T chipset for launch in Q1 2020. Chinese OEMs like OPPO and Vivo’s focus on the gaming smartphone market and the affordable premium segment can bode well for MediaTek’s new products.

The Taiwanese chipset maker wants to increase the average selling price (ASP) of its SoCs. The company’s primary focus is to provide smartphone SoCs at competitive prices. Its products have targeted Qualcomm’s Snapdragon 200, 400, 600 and 700 series in emerging markets through OEMs looking to diversify their supply chain.

MediaTek has also ramped up its product portfolio in the last few years with the Helio P series and the Helio A series chipset products. The Helio branding and marketing focused on key features like AI, and dual camera support has helped MediaTek gain mindshare in the market. The use of MediaTek chipsets is also increasing by Chinese OEMs. In fact, the low-cost Helio P22 and the Helio A22 chipsets were among the best-selling chipsets during Q2 2019.

In terms of numbers, in emerging markets account for nearly one-third of the smartphone market, and include countries like India, Indonesia, Vietnam, and MEA countries. MediaTek’s market share in emerging markets is almost 40% in the sub-US$150 price band, giving it the leadership position. In India’s smartphone market, MediaTek’s market share has gone up to over 30% in Q2 2019, from less than 20% in Q2 2018. The Helio P series and the Helio A series were the key drivers of MediaTek’s rising market share.

Given its value proposition, there is a strong possibility that MediaTek will dent Qualcomm’s dominance in the affordable premium segment. Counterpoint data also shows gaming smartphones have a bright future. Our Global Consumer Lens survey earlier this year revealed that 31% of smartphone owners are gaming for over three hours a day on their devices. All in all, the new G90 and G90T series will provide MediaTek with a stronger competitive edge as it seeks to expand its share in higher price bands.sea


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