In view of increasing adoption of the MT6575, a 1GHz chip solution developed by Taiwan-based MediaTek for use in 3G handsets and smartphones, by several China-based vendors and white-box clients, Qualcomm has lowered its quotes by keeping them close to MediaTek in order to strengthen its price competitiveness, according to China-based white-box vendors.

Following selling the 650MHz chip MT6573 in the China market during early October peak sales period, MediaTek has begun offering the MT6575 featuring mainstream a computing speed of 1GHz and four functions, GPS, FM, Bluetooth and Wi-Fi, in one chip. The specifications plus price and rich content available on MediaTek's handset development platform have made M6575 strongly competitive in the China market, the sources indicated.

Qualcomm has had its MSM7727 and MSM7727A compete with MediaTek's MT6573 and MT6575 respectively, the sources noted.

Based on a general price level of about US$10 for a 3G handset chip, the MT6575 is competitive enough in price, the sources indicated. To be competitive, Qualcomm has to decrease prices because its quotes for 3G handset chip solutions are mostly higher than MediaTek by more than 20%, the sources pointed out.

The competition for 3G handset chip solutions between Qualcomm and MediaTek will extend from China to emerging markets in 2012, the sources indicated.