Chinese baseband suppliers like MediaTek are trying to push their way up market into 3G handsets and even smartphones, potentially squeezing Qualcomm and ST-Ericsson. Qualcomm is reported to be biting back, going aggressively after the low end Chinese handset makers, which are the main base of MediaTek's huge volumes.
Chinese phone makers are a double-edged sword for a firm like Qualcomm, which retains high margins on its chips. But as they start to expand from low end, and even counterfeit, handsets into more sophisticated devices, they cannot be ignored. The US vendor - according to sources in the Shenzhen manufacturing community who spoke to Marbridge Consulting - is wooing midrange OEMs with four products targeted at smartphones that would retail for $100 (€75.34) to $120.
The midrange OEMs are currently testing Qualcomm's 7227, 7225, 7627 and 7625 smartphone processor/baseband systems, the sources said.
These handsets would mainly be for the new 3G networks in China, but handset vendors like Simcom, Prowave, Shengyao, Newings and Basewin are also starting to export their products to other emerging mobile economies and as white label offerings. In this, they are hoping to emulate Huawei and ZTE, both of which are now selling own-branded smartphones in the west.
Qualcomm is already a major supplier to these two giants, and has worked with them on ultra-low cost handsets as well as its usual smartphone targets. In particular, it has supplied components for low cost CDMA devices, a strength for ZTE. It is seeing incursions into its own markets from MediaTek, but also other Chinese silicon firms like Spreadtrum.
Qualcomm has also split its business development activities into two units, the new Global Market Development (GMD), to be led by Peggy Johnson, and Global Business Operations (GBO). GMD will "lead the process for commercializing new business opportunities that reside outside of an existing Qualcomm business unit", while GBO will "continue to focus on enhancing the business environment to support the continued growth of Qualcomm's technologies and products."
Original article: Qualcomm eyes MediaTek’s Chinese base