It was impossible not to notice the dramatic changes in the mobile handset market in the past few years, with new brands coming up and putting pressure on the old warhorses. Who was responsible? Vijay Govindarajan gives the credit to MediaTek in his guest blog at Harvard Business Review. Both Vijay and MediaTek are worth keeping an eye on.
MediaTek’s strategists and engineers figured out a way to design a much less expensive phone system. First, they designed inexpensive chipsets. Then they developed phone board designs using these chipsets and other phone components, and put together a software package for these phones. They also decoupled the phones from the carriers. (This decoupling has given rise to a grey market for mobile phones in emerging markets.) Finally, they licensed the hardware and software together as a “ready-made” kit to smaller phone manufacturers (OEMs), some of whom had no experience building phones.
The result? The mobile phone market, once dominated by close partnerships between wireless carriers and big OEMs, is seeing tremendous competition from newer manufacturers, some of which are literally running their businesses from their garages. In China alone, there are several thousand manufacturers who develop phones using MediaTek’s chipsets.