Mediatek

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  • Topic: Marketing, Cordless telephone, 3G
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  • Published : February 23, 2013
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Case analyze of "Shanzai! MediaTek and the "White Box" Handset Market" Synopsis:
Shanzhai Media Tek is a power house in the generation of handset. This has advanced through the several process and steps in technology. The first handsets that were produced by the company were the first generation 1G phones. They were synonymous because of the verity that they utilized analog transmission. However, the advancements in technology have since rendered analog transmission obsolete. This has been marked by the introduction of second generation phones, (2G phones). However, the connectivity, especially with regards to internet proved to be slower. This prompted the introduction of third generation phones (3G phones). Nonetheless, the uniqueness in Shanzhai Ji is based on the actuality of producing intermediate generation phones. This is attributed to the fact that the company produced 2.5G and 2.75G phones for use in the market (Mohr 256). Problem statement:

The significant problem is based on the verity that the company sold most of its chipsets to the Chinese producers. This was done in the hope that the producers were legitimate. However, the middlemen ended up selling the chipsets to the secondary markets and pocketing the profits. In essence, Intel faced similar problems with the middlemen. This was especially with regards to their microprocessors. They were sold to producers who appeared legitimate, but were not legally allowed to purchase the microprocessors (Doole 134). In the long run, the producers sold the chipsets at a profit. External analysis:

Industry structure:
Media Tek is a company that deals in the production of wireless electronic chipsets for mobile phones. It has been in the industry through the transition from analog to digital chipsets. The company has grown to be the third largest producer of electronic chipsets for mobile phones and related hand set equipments. It is estimated that in the first quarter of 2009, the company sold an approximate of 80 million chipsets, through exports. In the second quarter, it sold an approximate of 100 million chipset. Ideally, it is estimated that in the end of 2009 the company had exported an approximate of 300 million chipsets. In the global market trends of wireless chipsets the company commands an export of 1.2 billion chipsets. This is, by far, a significant achievement for the company. The relationship of the company with the consumers was modest despite allegations from power houses like Nokia. The allegations purported that Media Tek produced cheap knock off phones and introduced them into the market (Haig 23). Industry directions and trends:

It will be noted that Media Tek had come under great attack from competitors and newspapers as well. This was especially after the company was branded the status of knock off. In fact, some newspaper is reported to have described Media Tek product as counterfeit cool. Key success factors:

The Company banks on an economics of scale, especially when it comes to the amounts of chipset production. The company produces wireless chipsets in bulk, which are utilized in the production of handsets. The wireless chipsets are priced at relatively low prices compared to their competitors (De Moije 285). Therefore, it sells a lot of handset chipsets at low prices. Ideally, the success of the company comes from targeting low income earners by ensuring that they are at a position of owning a phone (Masterman 126). It is evident that the electronic chipsets link the phones will command the retail price of the phone (Pride 278). Therefore, Media Tek focuses on narrowing the cost of production of the chipsets. Competitive forces:

The mobile industry is advancing at an alarming rate. This is accredited to the verity that most technological firms are engaged in the phones race (Shimp 408). They are all bent on producing user...
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