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MediaTek wields LTE might in China

Posted: 10 Jul 2015 ?? ?Print Version ?Bookmark and Share

Keywords:LTE? smartphone? 3G?

Chip designer MediaTek will eat into Qualcomm's share in the Long Term Evolution market as the Taiwan-based company flexes its muscle in China's growing smartphone market, industry analysts said.

Qualcomm reduced its full-year revenue and profit forecast for the second time even after posting record quarterly licensing revenues and earnings for the second quarter of fiscal 2015 ending on March 29.

MediaTek's LTE market share is likely to double to 40-45 per cent in the second half of this year from 20 per cent in the fourth quarter of last year, according to a July 7 report by Randy Abrams, an analyst with Credit Suisse in Taipei. Abrams forecast that MediaTek's LTE shipments will fall in a range of 160 million to 165 million units this year, exceeding MediaTek's own expectations for 150 million unit shipments in 2015.

The company's LTE application processors "gained good traction in China" during the first quarter this year, according to a July 3 report by market research firm Strategy Analytics. "MediaTek will continue to gain share in LTE base bands in the next few quarters," Strategy Analytics analyst Sravan Kundojjala said in the report.

MediaTek

Taiwan-based MediaTek has enjoyed an advantage over other rivals in China, where it established strong business ties with local manufacturers more than a decade ago.

Room to grow

The smartphone business still has upside, as sales are likely to swell from 1.5 billion units in 2015 to 1.7 billion by 2017, according to Strategy Analytics. While China, India and the United States are driving smartphone growth worldwide, India will overtake the U.S. by 2017 to become the world's second-largest smartphone market, Strategy Analytics analyst Neil Mawston said in a July 1 report.

China, which also makes most of the smartphones sold in the rest of the world, is a strategic focus for chipmakers such as LTE market leader Qualcomm, followed by MediaTek, Spreadtrum, Samsung, Marvell and Intel. Shanghai-based Spreadtrum grabbed the No. 3 rank in the first-quarter 2015 LTE market with a 7 per cent revenue share, according to Strategy Analytics.

The company also overtook MediaTek to capture the No. 2 position in 3G base bands, scoring design wins with handset makers such as Samsung, Lenovo, Huawei, HTC and others, Kundojjala said.

"We expect Spreadtrum to gain share in LTE base bands too with its LTE apps processors," according to the Strategy Analytics analyst.


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