Spreadtrum, Mediatek in Cheap Smartphone Plays
Two chip designers, Taiwan’s MediaTek (Taipei: 2454) and China’s own Spreadtrum (Nasdaq: SPRD) are looking like interesting bets these days, as they seek to profit from burgeoning demand for cheap smartphones in emerging markets like China and India where carriers are trying to boost recently built 3G networks. In fact, MediaTek has always been a specialist at cheap cellphone chips, allowing it to play at the low end of a market otherwise dominated by the likes of Qualcomm (Nasdaq: QCOM) and Texas Instruments (NYSE: TXN). It entered the smartphone market with an Android-based chip earlier this year, and, after landing supply deals with names like Lenovo (HKEx: 992) and ZTE (HKEx: 763; Shenzhen: 000063) is reportedly in talks for another big deal that could see it supply Huawei, another leading cheap smartphone maker. (English article) Meantime, Spreadtrum is making its own interesting cheap smartphone play, focusing on the very limited market making chips for the homegrown Chinese 3G standard known as TD-SCDMA, whose only major proponent is China Mobile (HKEx: 941; NYSE: CHL). Spreadtrum has just announced its launch of an ultra-cheap chipset that will allow handset manufacturers to make TD-SCDMA smartphones for as little as $40 each, meaning such phones could easily retail below the $100 mark considered a key threshold for cost-conscious middle- to lower-end users. (company announcement) A lack of compelling handsets has been a major factor hindering China Mobile’s efforts to build up its 3G business to date. (previous post) The availability of a wide range of ultra-low-cost TD-SCDMA phones, assuming Spreadtrum can find customers for its new chips, could be just the catalyst that China Mobile needs to breath some new life into its 3G network. Equally important for Spreadtrum, its development of a TD-SCDMA smartphone chip seems to indicate it is also dedicated to the standard’s 4G successor, TD-LTE, which could put it in a strong position to be a big supplier in chips for that standard which is already being tested out in China and a number of other major markets, including Japan and India.
Bottom line: MediaTek and Spreadtrum are looking like strong bets in the cheap smartphone chip market, which should see strong demand from 3G and 4G consumers in emerging markets.
Related postings 相关文章:
◙ Spreadtrum Takes Smart Gamble on China 3G
◙ China Mobile: Poor 3G Approach Yields Weak Results 中移动3G策略不当 拖累公司三季度业绩
◙ Baidu, ZTE Earnings: More of the Same 百度和中兴财报：看上去没变化
