For 5 consecutive quarters, the shipping champion has been added to MediaTek, why is the impact on the flagship market still not optimistic?
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Author | Bao Yonggang
Edit | Wang Yafeng
In the third quarter of 2020, MediaTek's share of the mobile phone market surpassed Qualcomm for the first time, becoming the champion in smartphone processor shipments.
Since then, for five consecutive quarters, MediaTek has continued its strong momentum and maintained the first position in the global mobile phone processor market share.
In this process, MediaTek launched the 5G brand Tianji, and the products ranged from Tianji 1000 in 2019 to Tianji 1200 in 2020, constantly accumulating strength and rushing to the high-end and flagship markets.
The flagship product Tianji 9000 unveiled at the end of 2021 has made many people in the industry shine, and at the same time, it has unreservedly demonstrated MediaTek's attempt to impact the flagship mobile phone market and benchmark the industry's pioneer Qualcomm.
The shift period from 4G to 5G has made MediaTek a success. However, a former technology executive of a mobile communication company told Leifeng Network: "In the long run, qualcomm will still dominate the mobile phone processor market." A number of industry experts also agreed with this view.
If you want to succeed in the flagship market, even if you have beautiful technical parameters, you still face many challenges such as ecology, collaborator relationships, and consumer recognition. Is it really not possible for MediaTek to become a leader in the mobile phone processor industry?
1
Qualcomm Strategy Adjustment, MediaTek
Take the first place in the market
The global share of the mobile phone processor market is a commendable achievement, but judging the strength of a company cannot be judged from the overall share alone, but also from the performance of the market segment. MediaTek's achievements in recent years are the embodiment of strength, or the opportunities given by opponents?
According to a report by market research institute Counterpoint, MediaTek became the world's largest smartphone SoC supplier with a market share of 31%, surpassing Qualcomm's 29% market share. Data released by Omdia in 2021 also shows that MediaTek mobile phone chip shipments reached 352 million in 2020, with a global market share of 27%, surpassing Qualcomm's 319 million shipments (25% market share).
MediaTek became the global mobile phone processor market shipment champion in 2020, with multiple factors superimposed. One of the most important reasons is that in 2019, 5G is officially commercialized, and Qualcomm will focus its business on the 5G high-end market.
A senior analyst in the semiconductor industry pointed out: "Entering the 5G era, Qualcomm strategically focuses on the 5G market, but there are still 400-500 million shipments of 4G mobile phones in the world, which accounts for 1.3 billion yuan of global smartphone annual shipments." At present, the main suppliers of 4G chips are MediaTek and Zhanrui, so in terms of shipments, MediaTek still has a considerable share of the 4G market. ”
At the same time as Qualcomm's strategy was adjusted, Huawei's suppression by the United States also increased the space for MediaTek to increase its market share. "The proportion of self-developed chips used in Huawei mobile phones is relatively high, and before being sanctioned, Huawei HiSilicon's mobile phone chip shipments also had nearly 150 million." Senior analysts said.
Industry analyst Lv Penghao also told Leifeng Network, "Affected by the epidemic, in addition to the rapid development of 5G in China, Japan, South Korea and some European and American countries, the speed of the global transition from 4G to 5G is not as fast as expected, mediatek in this shift period, in the 4G market occupies a lot of advantages." ”
The background of the transition from the 4G era to 5G, as well as the changes in the market landscape, have created opportunities for MediaTek.
Former industry analyst Yao Jiayang believes that "MediaTek has also seized the opportunity and adopted the right market strategy." 4G is of great significance to MediaTek to increase its market share, and its 5G strategy is also correct in my opinion. First of all, in the context of lack of cores, MediaTek's tilt of production capacity to the mobile phone business is an important choice. Secondly, in the early stage of 5G commercialization, MediaTek took China as the main market and began to develop products with sub-6GHZ frequency, which met market demand. ”
According to CINNO Research data, from January to November 2021, In China's smart phone SoC market, MediaTek and Qualcomm ranked first and second respectively with terminal shipments of 102 million units and 99 million units, respectively.
With the first market share of mobile phones for 5 consecutive quarters, MediaTek also has the confidence to impact the flagship market.
2
Sufficient confidence, pixel-level benchmark Qualcomm
With a high market share and a "beast-level" flagship product, why is MediaTek still challenging to impact the flagship market?
MediaTek's success began with the "Turn-Key" solution in the 2G mobile phone era, after the 3G era, MediaTek has been closely linked with low-end mobile phones. In 2015, MediaTek launched the Helio brand, hoping to impact the flagship market in the 4G era, but ultimately failed.
Drawing on previous experience, at the end of 2019, when MediaTek launched its first 5G SoC, it not only adopted a new 5G brand name - Tianji, but also positioned the first product, Tianji 1000, to position itself at the high end. Unfortunately, MediaTek's positioned high-end processor is only mounted by OEMs in the 2,000 yuan mobile phone, and the Snapdragon 865 launched in the same year is still obvious.
By 2020, MediaTek seized the opportunity of the rapid growth of China's 5G market and further increased its market share by positioning the mid-range Tianji 800 and Tianji 720, the card slot 5G market. In January 2021, MediaTek launched an upgraded version of the Tianji 1200, which continues to attack the high-end market and prepare for the launch of flagship products.
Xu Jingquan, deputy general manager of MediaTek and general manager of the wireless communications division, revealed at an event at the end of 2021, "We decided a few years ago to hit the high-end and flagship markets. From planning to starting to design chips, to tape-out and customer introduction, the development time of Tianji 9000 is more than 2 years. ”
The Tianji 9000 is a 5G SoC launched by MediaTek at the end of 2021, and its "beast-class" performance parameters fully reveal MediaTek's attempt to impact the flagship market. MediaTek is very confident that the Tianji 9000 has a 20% multi-core CPU performance advantage over the Snapdragon 8.
Many industry experts believe that It is inevitable that MediaTek will once again impact the flagship market, MediaTek has always wanted to get rid of the stereotype of low-end, and from the perspective of MediaTek's revenue and gross profit margin, it must break through the high-end market. Especially under the strength of already having a relatively good market share, coupled with the superposition of multiple favorable factors, as a company that is good at observing market changes, MediaTek has planned flagship products two years ago.
Interestingly, from the performance parameters to the industrial chain cooperation, MediaTek Tianji 9000 can be said to be pixel-level benchmark Snapdragon 8. Lü Penghao believes that "the parameters of Tianji 9000 are eye-catching, and it is indeed the embodiment of MediaTek's ability to improve." ”
Performance parameters are getting closer and closer, which is also a necessity. Senior analysts said: "After more than ten years of development of the main chip of the mobile phone, it is difficult to have a significant gap in hardware capabilities. In particular, the part of the pure logic chip is optimized based on the Arm architecture. ”
However, MediaTek's benchmark Qualcomm flagship does not stop at simple parameter comparison. At the launch of the Tianji 9000, MediaTek introduced its cooperation with Samsung's image sensor business unit and the cooperation with Sony Semiconductor in imaging, and also announced a cross-border cooperation with discovery channels, which will use a mobile phone equipped with Tianji 9000 to shoot three works.
This can't help but be reminiscent of qualcomm announcing at the Snapdragon 8 conference that Qualcomm announced the creation of a joint laboratory with Sony to customize image sensors for the Snapdragon 8 platform, and Qualcomm has cooperated with China National Geographic for several consecutive years to use mobile phones equipped with Snapdragon's flagship processor to shoot documentaries in extreme environments.
Not only that, after the release of the Tianji 9000, MediaTek also put a large number of shopping mall screens and subway advertisements to hype the Tianji 9000, which is rare for MediaTek.
"MediaTek has been relatively passive in marketing publicity before, which is a reflection of the difference in resources between the two companies." Yao Jiayang said, "This time MediaTek's vigorous marketing, such as cooperation with Sony, also hopes to use Sony's leading position in the field of image sensors to highlight the uniqueness of its products." ”
Lu Penghao also believes that MediaTek's series of marketing is actually to convey to the market that it has kept pace with Qualcomm.
Senior analysts point out that competition for products will eventually evolve into competition for business strategies, including merchandising. In addition, the ability to build hardware and software ecosystem platforms is also crucial.
3
Impacting the flagship market, MediaTek is difficult to become a big brother
Even if the market share is the first, the product parameters are indistinguishable from the Qualcomm flagship, and the marketing means are pixel-level benchmarking Qualcomm. However, many industry insiders are on the sidelines that MediaTek can make a breakthrough in the flagship market, and they do not believe that MediaTek can become a leader in the 5G era.
First look at the market share, although MediaTek has the first market share in the mobile phone market in the past two years, its products are mainly low-end products, and the gross profit margin is low, which means that MediaTek wants to obtain the same profit as Qualcomm, and the shipment volume needs to be 1 times or even 2 times that of Qualcomm.
For example, a MediaTek 5G chip costs $50-60, but Qualcomm sells for $80-100, in which case MediaTek needs to almost double its shipments to generate revenue similar to Qualcomm.
Senior analysts said: "European and American companies are more pursuit of profit margins, so they will focus on high-margin products." ”
Looking at Qualcomm's financial report, we can see that Qualcomm's gross profit margin for the whole year of 2021 is about 57.4%, and MediaTek's gross profit margin level in 2021 is about 47%.
CINNO Research's data also confirms the difference in the focus of the two companies, in mediatek's focus on China's 5G smart machine SoC market, from January to November 2021, Qualcomm terminal shipments of about 80 million, the market share of about 36%, ranking first. MediaTek terminal shipments are about 75 million units, accounting for about 33% of the market.
That is to say, although MediaTek has the largest market share in the entire mobile phone SoC market, Qualcomm still has an advantage in the 5G market with greater growth potential in the future.
Some insiders revealed to Leifeng Network that MediaTek's goal in 2022 is to catch up with Qualcomm in the market share of the 5G market.
From a technical point of view, MediaTek's 5G SoC does not support millimeter wave will become a challenge for it to increase its market share. Although 5G will begin to be popularized from the Sub-6GHz band, including the United States and some European markets, the commercial use of 5G is mainly in the millimeter wave band.
A source told Leifeng that MediaTek plans to launch a 5G SoC that uses TSMC's 6nm process and supports millimeter wave in 2022, mainly for the US market. However, from the perspective of the process adopted, MediaTek's product positioning should be mid-range, which is beneficial to MediaTek's expansion of the 5G market, and it is difficult to help it break through the high-end market.
At the technical level, Yao Jiayang believes that the performance of the Tianji 9000 in the GPU will also have some disadvantages compared to Qualcomm. However, due to the CPU frequency set to a higher frequency, coupled with the use of TSMC's 4nm process, this will be the advantage of the Tianji 9000. Moreover, MediaTek's 4nm using TSMC is MediaTek's weight in terms of yield and production capacity.
"Hardware parameters are difficult to determine the ultimate commercial success." Senior analysts pointed out that "factors such as brand value, ecological ability, and collaborator relationships are all important." ”
Due to Qualcomm's long-term position in the flagship market, Qualcomm has advantages in terms of platform adaptation or control of the 5G ecosystem.
"Being able to achieve a better adaptation through 1-2 generation upgrades is a relatively big challenge for MediaTek." Lv Penghao said, "There must be a flagship mobile phone using Tianji 9000 to create a benchmark, there will be other OEMs to try, there is Tianji 9000 explosive products for its success is very important." Of course, Tianji 9000 increases the choice of mobile phone manufacturers in flagship products, coupled with the tight supply of chips, as well as supply chain security considerations, will also be the reason why mobile phone manufacturers choose Tianji 9000. ”
Yao Jiayang believes that Xiaomi is the key to MediaTek's breakthrough in the flagship market. Because Xiaomi has a large shipment volume, and the current positioning of Xiaomi is also a high-end market, it is a pity that Xiaomi's (excluding Redmi) 5G mobile phone does not use a Tianji processor. If Xiaomi does not adopt it, MediaTek can only hope that OPPO and vivo can have explosive flagship products based on Tianji 9000.
Lv Penghao believes that "after the listing of the flagship mobile phone of Tianji 9000 in the first quarter of 2022, MediaTek's market share can still increase, indicating that the market's recognition of MediaTek's high-end products has increased, but if mediatek's market growth has stagnated after the shift period, it shows that MediaTek and Qualcomm still have a relatively large gap." ”
The global share of 5G is increasing, and whether MediaTek can successfully impact the 5G flagship market is about to reveal some answers.
Can MediaTek write the story of a successful counterattack?
END