Publications
Publications
- April 2010 (Revised December 2010)
- HBS Case Collection
Shanzhai! MediaTek and the "White Box" Handset Market
By: Willy C. Shih, Chen-Fu Chien and Jyun-Cheng Wang
Abstract
The term "white box" is often used to describe products without a brand name. Such products are assembled from standardized parts, and they became a very popular category of desktop PCs. Hsinchu, Taiwan based MediaTek is a fabless semiconductor company that unleashed a white-box market in mobile phone handsets by offering an innovative "complete solution" for 2.5G and 2.7G handset manufacturers, dramatically lowering the barriers to entry into the business. Besides enabling many Chinese branded manufacturers to enter the business, the grey market in components unleashed a complementary market of "Shanzhai" makers. Together these firms captured a significant fraction of the Chinese market, as well as exports (both legal and grey) to 102 countries. CEO Ming-Kai Tsai is faced with the question of the best growth path. While multiple tier one handset makers are dismissive of MediaTek, perhaps because of its role in enabling the Shanzhai, the company's offerings have enabled an "army of ants" to challenge the leaders. Can MediaTek move up-market to sell its chipsets to the likes of Nokia? Under what terms?
Keywords
Disruptive Innovation; Growth and Development Strategy; Emerging Markets; Competitive Advantage; Wireless Technology; Semiconductor Industry; Taiwan
Citation
Shih, Willy C., Chen-Fu Chien, and Jyun-Cheng Wang. Shanzhai! MediaTek and the "White Box" Handset Market. Harvard Business School Case 610-081, April 2010. (Revised December 2010.)