In the fourth quarter of 2023, MediaTek solidified its lead in the global mobile SoC market by shipping over 100 million smartphone SoCs, according to research firm Canalys. This surpasses 78 million units for Apple's iPhone shipments and 69 million for handsets powered by Qualcomm processors. MediaTek's strong performance in the mid-range and low-end segments against Qualcomm's competitive prices will serve as a solid foundation for the Taiwanese SoC specialist to tap into the flagship market in 2024.
A consumer market slowdown since 2022 has led to a wave of inventory destocking, impacting both major mobile SoC vendors. Facing declining shipments and pressured by excess stock, even Qualcomm, despite its focus on the flagship market, has resorted to price wars to clear mid-range and low-end SoC inventory.
As for MediaTek, repeatedly stressing that price cuts cannot bring revenue growth, it also acknowledged the pressure from its main rival. However, the company has managed to retain a strong market share base. With Qualcomm ending its price-cutting strategy amid a recovery of the mobile phone market, MediaTek is well-positioned to sustain its leadership in the mid-and low-end mobile phone SoC segment.
Industry analysts said that MediaTek's success in shipping mid-range and low-end SoCs will serve as a springboard for the company to venture into the flagship market in the future. However, it's worth noting that both MediaTek and Qualcomm have recently diversified their focus, allocating more resources to areas like AI, high-performance computing (HPC), and automotive electronics alongside mobile SoCs.
Their resources allocated for mobile phones are almost concentrated on flagship phones. With Qualcomm not deepening its presence in the mid-and low-end market, and competition from other manufacturers such as China's Unisoc remaining limited, MediaTek can more flexibly formulate its marketing strategies and allocate its R&D resources, the analysts said.
MediaTek's Dimensity 9300, developed in collaboration with Vivo, has proven successful, significantly boosting MediaTek's brand image. In 2024, MediaTek will expand its market share with the Dimensity 9400 manufactured using 3nm process technology.
MediaTek might be somewhat cautious toward fully cooperating with Android due to customers seeking to maintain a balanced relationship with Qualcomm. However, the company can continue expanding its presence in this high-end market and eventually turn that market share into revenue growth if consumer adoption of MediaTek's flagship SoCs keeps rising.
MediaTek holds the majority market share in mid-low-end mobile phones, allowing the company to extend some consumer-attractive features to lower-priced product lines. The operation of edge-side generative AI models relies on powerful chips and memory. However, edge-side generative AI models will also be a key driver for MediaTek to increase shipments and solidify its market share if it can be continuously optimized to function on mid-low-end mobile phones.
