The Success Story of MediaTek in the Chinese Mobile Phone IC

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The Success Story of MediaTek in the Chinese Mobile Phone IC

Description:    As the structure of the mobile phone industry has changed and as the key factors affecting
                competition between mobile phone vendors have been transformed, the lion's share of the profits
                in the Chinese mobile phone market have gone, first to the leading international mobile phone
                vendors, then to those Chinese mobile phone manufacturers with a production and domestic sales
                license, to the Korean and Taiwanese mobile phone firms, and then to Chinese mobile phone design
                houses. Since 2005, the mobile phone reference designs supplied by Taiwanese company MediaTek
                have been transforming the competitive balance in the Chinese mobile phone market. Benefiting
                from its innovative business model, MediaTek's share of the mobile phone IC solution market in
                China has shot up from less than 2% to over 50%. This report examines MediaTek's innovative new
                business model.

Contents:       1. Chinese Mobile Phone IC Market
                Figure 1 Chinese Mobile Phone IC Market Share by Vendor, 2Q 2003 - 3Q 2007

                2. Evolution of MediaTek
                2.1 Characteristics of IC Design Houses
                2.2 MediaTek's Operations and Strategy
                Figure 2 MediaTek's Revenue, 1998 - 2006
                2.2.1 MediaTek's Approach to the Market
                2.2.2 MediaTek's Strategic Thinking
                2.2.3 Management Philosophy

                3. MediaTek's Strategy for Developing the Chinese Market Searching for Space and Time
                3.1 Searching for Space and Time
                3.1.1 Motives for Expansions into Mobile Phone ICs
                3.1.2 Moving into the Chinese Mobile Phone IC Market
                3.2 Rethinking the Definition of Market Boundaries
                3.2.1 Expanding Industry Scope and Redefining the Market
                3.2.2 Raising the Level of Product Integration to Attract New Customers
                Table 1 Collaboration Models Between Phone IC Suppliers and Mobile Phone Manufacturers
                3.3 MediaTek's V-shaped Strategy
                3.3.1 Stages in Market Development
                Figure 3 MediaTek's V-shaped Strategy
                3.3.2 Improving Integration in Response to Market Demand
                3.3.3 Business Model Tailored for New Market Demands
                3.4 Integrating Resources Needed to Turn Vision into Reality
                3.4.1 Managerial Capabilities
                3.4.2 Courage to Take Risks

                4. MIC Perspective
                 4.1 Innovative Breakthrough
                 4.2 Strategic Planning Based on Resources Available
                 4.3 An Innovation Model Spreading to Other Industries

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