Shanzai! Mediatek and the 'White Box' Handset Market

Posted: 19 Apr 2012  

Chen-Fu Chien

National Tsing Hua University

Jyun-Cheng Wang

National Tsing Hua University

Date Written: December 22, 2010

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 China 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?

Learning Objective:
Ask students to use the lenses of disruptive innovations, modularity, and jobs-based segmentation to understanding the opportunities and challenges in emerging markets like China.

Suggested Citation

Chien, Chen-Fu and Wang, Jyun-Cheng, Shanzai! Mediatek and the 'White Box' Handset Market (December 22, 2010). Harvard Business School Technology & Operations Mgt. Unit Case No. 610-081. Available at SSRN: https://ssrn.com/abstract=2041963

Chen-Fu Chien (Contact Author)

National Tsing Hua University ( email )

Department of Industrial Engineering
and Engineering Management
Hsin Chu 30043
Taiwan

Jyun-Cheng Wang

National Tsing Hua University ( email )

Hsin Chu 3
China

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