MediaTek Buys Stake in China Software Developer

MediaTek bought a major stake in a Chinese developer of mobile phone software, just weeks after buying most of its products and intellectual property.

The Taiwanese chip designer paid US$1 million for a share of Beijing software developer Pollex Mobile Software as it expands its business to provide chips for ultra-low-cost handsets. The company faces tough competition in the market from other chip developers, including Texas Instruments and Infineon Technologies.

Users in areas where ultra-low-cost handsets are popular, such as China and India, should benefit from the chip rivalry because chips are the most expensive part inside a mobile phone, and the competition should help reduce prices.

MediaTek cited strong sales of mobile phone chips in China as one of the key reasons it posted strong earnings in the third quarter.

Although an English translation was not available, it appears that Pollex will be renamed MediaTek Pollex Technology. MediaTek officials could not be immediately reached for comment. In a statement, the company said the Pollex purchase will help it expand its wireless business in China and improve its customer service.

China boasts the largest mobile phone user population in the world, at well over 400 million, according to government data.

A few weeks ago, MediaTek bought the rights to several dozen software and middleware applications from Pollex for US$13 million. MediaTek may have purchased the software and patents first and then separately paid for a stake in the company in order to avoid hassles caused by strict Taiwanese investment regulations regarding China, one analyst said.

-Dan Nystedt, IDG News Service (Taipei Bureau)

Related Link:

• MediaTek Expands Its Mobile Phone Biz

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