MediaTek Cools Heels on High-End Smartphone Chipsets

A group of leading smartphone processor designs emerged in 2017 from the likes of Apple, Huawei, MediaTek, Qualcomm, and Samsung. However, only four of the five made it into device portfolios of the Top 10 smartphone OEMs. The laggard was clearly MediaTek with its Helio X30 deca-core processor.

Samsung and Qualcomm both focused on power optimization in chips made on Samsung Foundry’s 10 nm process node, while Apple and Huawei’s HiSilicon subsidiary released processors used exclusively in their own smartphone brands, emphasizing the use of artificial intelligence (AI) technologies to enhance the user experience.

MediaTek inked deals with two OEMs for the Helio X30: the Elephone X8 Lite and Meizu Pro 7 Plus. Partnerships from previous generations of the Helio processors did not pan out for the X30 chipset. The company’s sweet spot has been enabling numerous Chinese handset makers with affordable, yet competitive, solutions.

MediaTek representatives in an online tech blog interview said that the X30 lacked some of the latest modem specifications necessary to keep the system-on-a-chip (SoC) competitive in all the key regional LTE markets. Many of the Chinese OEMs launched mid-range smartphones during 2017—a sign that MediaTek had gone too far up-market with the Helio X30 introduction.

Getting back to its roots and understanding the needs of its customers now requires MediaTek to take a step back on processor development. Rather than race to keep up with the top four chipset designers, MediaTek must focus on honing its mid-range processors or risk alienating its customer base. As a result, ABI Research expects Helio P-series chipsets will become the new top-end for MediaTek.

A future re-entry to the leading chipset club is not out of question for MediaTek. The company has demonstrated that it hasthe skills in-house to pull away from the bulk of Arm architecture reference designs being pushed through Taiwanese semiconductor foundry TSMC. It cannot, however, force its customers to come along with such a drastic market departure without giving them cause to change their business models at the same time. A lot of persuasion and trust-building is necessary to change the customer’s mind, which takes time, maybe years.

Alternatively, or potentially at the same time, MediaTek can establish a strategic team chartered with building a business model for the Helio X-series around a smaller subset of customers and aligning its revenue expectations accordingly.