MediaTek Inc’s (聯發科) effort to develop handset chips for Android solutions aims to reverse a recent plunge in sales, an analyst said yesterday.
The integrated circuit designer said on Monday it had joined the Open Handset Alliance, which is a partnership of more than 71 mobile communications firms formed to develop the Google-registered Android operating system.
“MediaTek is under pressure to boost sales after reporting disappointing revenue figures in recent months,” Grand Cathay Securities (大華證券) analyst Mars Hsu said.
“Participation in the Open Handset Alliance is expected to help MediaTek penetrate the branded handset market, instead of relying on ‘bandit’ cellphones, which are the company’s major source of earnings,” he said.
MediaTek last month reported a 18.43 percent fall in sales because of a price war in the Chinese market for the cheap, unbranded handsets known as “bandit” cellphones.
The Chinese government’s efforts to crack down on tax evasion by bandit-phone makers also affected the company’s sales.
Sales totaled NT$29.97 billion (US$933 million) in the second quarter of the year, well below below its estimate of NT$31.1 billion to NT$33.3 billion.
Hsu said cellphone chips account for about 75 percent of MediaTek’s total sales, and China has become the company’s largest phone chip buyer.
“There is speculation in the market that MediaTek is likely to design chips for handsets made by HTC Corp (宏達電) and LG Electronics Inc. Its presence in the Open Handset Alliance may be paving the way for this,” Hsu said.
A MediaTek spokeswoman declined to comment on specific customers, but said the company’s participation in the Open Handset Alliance showed its determination to provide more products to its customers.
“The announcement to join the Open Handset Alliance shows MediaTek has become part of the Android family,” she said.
As one of the Open Handset Alliance members, “MediaTek strives to provide device makers and partners with multimedia-rich chipset solutions, efficient services and experienced technical teams that differentiate our Android-based solutions,” Jeffrey Ju (朱尚祖), the general manager of MediaTek Wireless Communication Business Unit for Smartphone, said in a statement.
MediaTek is scheduled to begin commercial production of 2.75G smartphone chips for the Android operating system in the third or fourth quarter of this year, the company spokeswoman said.
Commercial production of a 3G system on chip for Android devices is scheduled to be launched in the first quarter of next year.
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