MediaTek-Android Deal to Grow Shanzhai Further?

According to a Network World article, Taiwanese firm MediaTek has struck a deal with Google to release low-cost chipsets specifically for Android. For those familiar with the Shanzhai concept and market (read here for more info), this could be a game changer in developing markets where this approach continues to grow in strength.

For those that don’t know, MediaTek has for years been the supplier of a “system on a chip” that many China-based handset manufacturers have used to eat away at the market shares of many mobile giants like Nokia, Moto, and Samsung. Collectively, they are labeled as “Shanzhai” and are as much a culture as a business. Some of them are the source of fake name-brand phones, but many develop their own (creative and hilarious) designs. When you have a company like MediaTek who can provide a cheap hardware solution, it becomes easy for new companies to put out their own phone model.

So how does this new announcement affect the Shanzhai ecosystem?

Even though MediaTek partnered with Microsoft, a lower-cost Android platform provides a real weapon. Not only do they make a significant jump in terms of UI and functionality, they get access to a growing developer base. On some metrics, this could allow them to stay on par with other big-brands using Android, and maybe even ahead of Nokia/Symbian. Obviously they lack the marketing and distribution to really go big, but 1000 little guys each carrying a pretty big gun has the potential to do serious damage to existing players.

Not only is the Shanzhai movement strong in China, but their products are making inroads into India and Africa, which are strongholds of companies like Nokia. Africa is a rapidly growing mobile market, one that is still not yet one. If any of the Chinese manufactures (even a Shanzhai one) were to overcome the perceived issue of Chinese-made products, things could change. And in markets like India, where once again Nokia has a huge brand preference, a Shanzhai-Android combination could start tilting the market. As a market that values new features at an extremely low price, this new type of competitor could sway over many of the locals.

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