Why your MediaTek-based phone is among the cheapest on the market

In Business by Ramon LopezLeave a Comment

Image via allthingsd.com

A couple of days ago, I sat down with Cedric Chang, a MediaTek account manager assigned to the Philippines, to shed light on a few burning questions that consumers may want answered about the Taiwan-based company’s main business of selling chipsets. Chipsets that, mind you, power a good majority of Android devices on offer not only in the Philippines but in other parts of Asia, including China and India.

The company rep explained why MediaTek-based phones are generally more affordable than the competition; and it’s not because MediaTek makes the cheapest silicon out there — though they are priced lower than their Qualcomm counterparts.

What’s the reason for the killer price point? It’s simple: A flood of ODMs competing to give the best price.

There’s a glut of chip makers in China that undercut big names and lure customers in with rock-bottom prices, Chang revealed to me.

So what’s the reason for the killer price point? It’s simple, actually: A flood of ODMs [original device manufacturers] — or companies that design and manufacturer devices for other companies to sell — struggling to achieve a foothold in a ruthless industry and competing to give the best price.

As of 2015, there are 1,294 Android device brands out thereaccording to a report released by OpenSignal, based on data collated from 682,000 devices. That figure is expected to increase next year so you can just imagine how cutthroat the competition can be, especially among MediaTek’s customers.

“We cater to more ODMs [than the competition]. And when there are over 100 ODMs that can provide phones with MediaTek chips inside, they really have to compete with each other to win over customers,” Chang said.

By contrast, the number of phones that run on competing chipsets, such as those from Qualcomm and Intel, is far fewer so there’s less pressure on manufacturers to keep their prices down.

‘When there are over 100 ODMs that can provide phones with MediaTek chips inside, they really have to compete with each other to win over customers.’

There you go, straight from the horse’s mouth; well, actually Chang’s mouth. Surprised? You’re not the only one.

Now, as to when or if your phone will be updated to Android Lollipop, he obviously has no idea what to tell you, though he did point out that ODMs are largely to blame for the delay or lack of software updates in the Android community.

Many manufacturers, I’m told, for whatever reason or reasons, believe that it makes more business sense to spend the meager resources they have on next-gen devices than to utilize them to support ageing hardware.

He makes a sound case, but I think that the reasons for the failures and disappointments are a lot more complicated than meets the eye. Certainly, it would be unfair to pin the blame solely on the likes of Cherry Mobile and Starmobile that come under flak for not updating their phones in a timely manner, if at all.

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Ramon Lopez

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Reviews editor: Ramon "Monch" Lopez has 16 years of professional experience creating and editing content for print and digital publications such as Yahoo. He headed the gadgets-merchandising division of one of the Philippines’ largest retail operators somewhere in between.