MediaTek Inc., Taiwan’s biggest chip designer, had a tough year last year. It used to dominate the low-end mobile phone market. But its market share dropped significantly last year as its rival, Shanghai based Spreadtrum, launched a stable and lower price product. This year, it is hedging its bet on Android phone. Can it make a come back??

MediaTek used to supply 90% of the chip of the low-end mobile phone manufactured in China. But, something happened in the beginning of last year. One of the new models of Mediatek’s chips is not stable enough. More correctly, its rival, Spreadtrum, after years of trial, finally, came up with a chip that is stable enough for the phone manufacturers. With a low price, about 10-15% lower than Mediatek, Spreadtrum quickly gained market share. It had 25% at the end of last year. Mediatek’s market share shrank to 70% while privately held Taiwan based MStar had the remaining 5%.

To rebuild its long-term competitiveness, Mediatek is hedging its bet on smartphones running Google’s Android operating system. Its Android 2.2 solution has been gaining traction since it launched in last November. It will have better and faster Android products coming out in mid-2011 and again in late 2011. At the current pace of price drop, Android phone at US$100 retail price can be reached for the entry-level models by mid-2011. Mediatek hopes to sell over 10 million unit of chipset for Android phones this year.

Start your free trial now.

Get instant access to all our premium content, archives, newsletters, and online community.

Monthly Membership

Yearly Membership

What you get

Full access to all premium content and our full archives

Members'-only newsletters

Preferential access and discounts to all TechNode events

Direct access to the TechNode newsroom

Start your free trial now.

Get instant access to all our premium content, archives, newsletters, and online community.

Monthly Membership

Yearly Membership

Sherman So

Author of Red Wired: China's Internet Revolution, the first book to completely survey the nature of China's internet. (http://redwiredrevolution.com/) She previously was the lead China technology reporter...