MediaTek is currently a major mobile application processor (AP) supplier in China and is enjoy high shares in the country's smartphone and tablet AP markets; however, lacking clients from western countries, the company is only able to achieve limited growth in its share of the worldwide AP market and the percentage is only expected to reach 20.22% in 2016, up from 19.69% in 2012, according to Digitimes Research's latest mobile APs report.
Meanwhile, MediaTek is also facing challenges, including competition from China-based players such as Spreadtrum as well as its existing clients pushing their in-house solutions, Digitimes Research's report noted.
MediaTek is seeing difficulties entering into the high-end segment. Although the company has launched several APs with prices and performances almost reaching the level of competing high-end solutions, they either have weak demand or have been adopted by clients for the mid-range and entry-level segments.
Although these solutions' high prices have benefited MediaTek's gross margins, clients not using them for the high-end segment means that the clients are still not confident about these solutions.
MediaTek's tablet AP solutions have also started to overlap its smartphone AP solutions since the company's Wi-Fi-only tablet solutions are not competitive enough against competitors, while Wi-Fi plus telecommunication-supporting tablet solutions are almost identical with the one for smartphones.
Although these tablet solutions can also be used for products such as set-top boxes (STBs), PND or smart imaging systems, MediaTek has not been performing well in these areas.