Shanzhai! MediaTek and the “White Box” Handset Market
Strategy and Competition
Word Count: 1, 496
February 14th, 2013
With the rapid evolution of telephony in the past few years, many wireless chipset manufacturing plants have confronted challenges adapting to the emerging market trends. In 2009, MediaTek took the fabless semiconductor market by surprise, capitalizing on roughly a third of the sales of the entire market. Although, as the marketplace evolved, so did technological innovation in the field, leaving Mr. Tsai, the CEO of MediaTek, with a great dilemma. Tsai confronts great challenges in attracting tier-one companies (I.E Nokia, Motorola, or Samsung) to purchase MediaTek’s product, due to major competitors in the industry. Currently, MediaTek is indirectly a mass supplier of chipsets to the Shanzhai (counterfeit) market. Tsai is sceptical of the company’s future in this market segment due to its uncertain characteristics and unforeseeable evolution, and is thus contemplating shifting to the more rigid market segment; tier-one brands.
2. External Analysis:
1. General Environment
Technological: In the past three decades, a major shift in technology has prevailed in the mobile handset industry. Through innovation and technological advances, the market shifted from analog transmissions (1G), to digital mobile communications in 1992 (also known as 2G), and ultimately to the Wideband Data Communications network (3G). With rapid changes in this dynamic marketplace only the most well-funded and well-managed companies have managed to emerge from generation to generation, whilst others have been unsuccessful.
Sociocultural: In the past thirty years, the evolution of the cellular mobile device market has had a vast impact on the interactional behaviour within society. With mass availability and affordability of