Hardware
MediaTek spells out secrets to smartphone leadership
The world’s leading maker of processors for handsets tells us why it leads globally, and why South Africa leads in Africa. By ARTHUR GOLDSTUCK.
For many, it is a given that South Africa is falling behind the rest of Africa in its tech readiness.
Some trends seem to confirm this, especially in the startup arena. Global research centre StartupBlink last week ranked Lagos and Cairo as the top two startup ecosystems in Africa, with Cape Town in 3rd place, and Johannesburg 5th after Nairobi.
Google’s first cohort for its “Google for Startups Accelerator: AI First” programme, announced last week, included only one South African entity – Avalon Health – while Nigeria, Kenya and Ethiopia each contributed a pair of innovative businesses.
However, this tells us little about overall tech adoption. A better measure is to look at how individuals are using tech. Here, South Africa stands apart.
This became apparent during a media briefing in Dubai this month by smartphone chip leader MediaTek, which last year became the world’s biggest supplier of processors for handsets. It also provides chips for smart TVs, Wi-Fi devices, tablets and wearable gadgets.
“South Africa within Sub-Saharan Africa is that it’s almost its own sub-region,” says Rami Osman, business development director of Mediatek for Middle East and Africa. “The numbers are different, smartphone penetration is different, the average selling price is different, the average revenue per user is different. As a global chipset company, it’s difficult to customise our strategy per country, but South Africa leads.”
Rami Osman shows a MediaTek chip during the company’s Technology Diaries event in Dubai. Picture by ARTHUR GOLDSTUCK.
Mediatek chips went into 2-billion devices globally last year, helping the Taiwan-based company generate US$18.5-billion revenue. Of that, it spent US$3.9-billion on research and development (R&D). That’s a 21% commitment to innovation, compared to a worldwide average in the semiconductor or chip industry of around 13%.
That’s one of several secrets to Mediatek’s global leadership. Equally significantly, it has worked closely with challenger smartphone brands: relative newcomers like Xiaomi, Oppo, Vivo, Realme, Tecno and Infinix.
These manufacturers are known for lower cost smartphones, with prices kept down thanks to using Mediatek chips that pack in more features for the same price as rival Qualcomm. However, that is changing, as each of the brands start moving up the value chain to produce phones that compete with flagship devices from the likes of Samsung and Apple.
While Qualcomm dominates in flagship devices, Mediatek has more than 50% market share of chips in Android phones in the Middle East and in Africa. Now it is coming after the top end of the market.
“To fully serve the premium segment, it’s important for us to give the consumer a variety of options. Every year the price tiers are almost the same but the features are increasing.”
This is especially significant for the South African market.
“South Africa has a premium segment, unlike the rest of sub-Saharan Africa. It has a good premium segment and it will benefit from this variety. We’re working with some design houses in South Africa, and maybe we can create solid partnerships in the cellular and Wi-Fi space.”
The advantage, for local assemblers, is that they would have access to chip sets that already contain much of the technology that, in the past, would have had to be put together piece by piece.
“I always say that we put more silicon on the chipset than our competition,” says Osman. “We make a system on a chip, which means you put the Bluetooth on a chip, you put the USB controller, you put the CPU, you put the GPU, all on a chip.”
“It helps us with the integration and it saves costs. As a result, MediaTek is very successful in taking the technology to the masses. We have to do more for less. If you spend a billion dollars on marketing, it will eventually fade away. But if you spend it on R&D and focus on the customer, the brands, and they are successful, we reap the benefits.”
* Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee
