Low-cost smartphones may soon begin to cannibalize the market for feature phones as the former devices are affordable enough to attract more consumers in emerging markets, particularly China, according to Hsieh Ching-chiang, president for IC design house MediaTek.

MediaTek's recently-launched MT6575 solution, designed for entry-level and mid-range Android phones, will drive company revenue growth in 2012, Hsieh indicated. The chip will also be incorporated into dual-core smartphones, with mass production for first models scheduled to begin in the third quarter, Hsieh said.

The new chip targets the market for US$150-180 priced smartphones, and has been adopted for Lenovo's 750-series smartphones, Hsieh pointed out.

Smartphone solutions accounted for about 10% of MediaTek's total handset-chip sales in 2011, and the proportion will climb significantly in 2012, Hsieh noted. He also disclosed that the firm will expand its smartphone chip line to include quad-core models in 2013.

In addition, MediaTek will continue promoting its MT6573 solution for sub-US$100 feature phones in 2012, Hsieh said. The feature phone market is still where MediaTek generates most of its sales, and therefore the firm thus far has no plans to stop developing chips for the sector, Hsieh said.

Expanding its market presence in China remains MediaTek's major goal in 2012, according to Hsieh. The firm expects to ship 50 million handset solutions to the region in 2012, up from about 10 million units in 2011.

Hsieh added that MediaTek expects to come up with a clear roadmap for products targeting tablet PCs in 2013 but remains focused on smartphone applications this year.

Source:digitimes