MediaTek joins Apple’s supply chain

For many foundries, chip factories, battery factories and even display factories, being able to join Apple’s supply chain and become the supplier behind the iPhone isn’t just about golden opportunity but also evidence that their products are recognized by the industry.

According to Economic Daily Taiwan, the MediaTek chip has successfully joined the 100% Apple-owned headphone maker Beats, which is expected to start shipping in February and March this year. This means that MediaTek has officially received the approval of Apple, also the first time “the Apple” put foreign chips into headphones products.

The insoluble link between MediaTek and Apple

In fact, since 2017, information about “MediaTek is expected to join the iPhone supply chain” has spread. At the time, Apple was fighting for a patent with Qualcomm and needed to replace the new iPhone’s communication dock to get rid of its reliance on Qualcomm. In these circumstances, MediaTek, which is so attractive in terms of production capacity, technology, and cost-effectiveness, naturally attracted Apple’s attention, but it’s a pity that Apple finally chose its base band. Intel and bypass MediaTek.

In February of the same year, MediaTek confirmed its subsidiary Xu Si Investment had publicly acquired Airo Technology (Airotech) and achieved its 100% acquisition target in the third quarter of the same year. It is a microchip design manufacturer specializing in developing highly integrated circuits for wireless communication. The company has experience in developing single-chip and low-power Bluetooth wireless audio system solutions.

For most tech enthusiasts, Airotech is primarily known as a TWS headphone solution provider. As one of the first to enter the TWS headphone market, the AB1526, AB1526P and AB1532 Bluetooth audio chips have been widely adopted by the industry in recent years, producing a large number of fake AirPods products.

Thanks to the widespread elimination of the 3.5mm headphone jack on mobile phones, the TWS headphone market has grown rapidly. Of these, fake AirPods rely on Apple’s low price and popularity to quickly dominate the low-cost market. According to the incomplete statistics of the supply chain, by 2020, the shipment of fake AirPods will reach 600 million units while the shipment of genuine AirPods will only be between 80 and 90 million.

On the other hand, amid increasing user demand, Airotech’s Bluetooth audio chip also rapidly improved in performance. In addition to the fake AirPods, more and more well-known brands of wireless Bluetooth headsets are adopting Airotech chip solutions, including cell phone makers such as Huawei and Xiaomi, as well as sound makers. bars like Edifier and 1MORE.

Cheaper Apple headphones coming soon?

According to the third quarter of 2020 TWS market survey report provided by Counterpoint, Apple accounted for 29% of the market share, down 6% from the previous month and remains the market leader. Apple once dominated the TWS sector, with 60% market share in the fourth quarter of 2018. Today, as competition continues to increase, Apple’s market share is shrinking. As brands such as Xiaomi, Samsung, Sony and Huawei are closing the gap with Apple in product design and experience, these manufacturers will compete fiercely by 2021.

For Apple, the biggest downside is that it doesn’t have many product options. For current Apple users, the only Apple headphones they can choose from are the AirPods 2, AirPods Pro, and AirPods Max, which are too expensive to become widely available.

So where is the solution for Apple? The answer is actually very simple, launch a new, affordable headset. This can make up for the lack of Apple’s TWS line of headphones in the low-cost segment, while also allowing users to have more options to experience. Even so, more than half (54.36%) of netizens are not very optimistic about the so-called low-cost version of Apple’s AirPods made by 9To5Mac.

Since there’s no way to get started with the AirPods, Apple had to choose a different path. Beats is a veteran audio maker, which was officially acquired by Apple in July 2014. Compared to the AirPods’ relatively high unit price, Beats has more room for pricing, and has more low-priced products. On 13/10/2020, Apple launched the latest Beats Flex neck Bluetooth headset, priced at about 1.1 million VND, with the hope of using this headset to hit the cheap market.

Interestingly, products like the Beats Flex that are powered by Apple’s W1 chip and designed based on older products still have good buying power. In the future, Beats products are expected to reduce product prices again by introducing external chips, further expanding mid-range and low-end products, improving market competitiveness. school. Combining the cost-saving advantage of the MediaTek chip with the Beats headset brand, Beats will bring greater benefits to Apple in the future.

For MediaTek, entering Apple’s supply chain system is certainly a huge opportunity. On the one hand, this means that MediaTek can bring back huge orders from Apple. Judging from nearly 200 million iPhone shipments per year, Apple’s TWS headphones (including the AirPods lineup and Beats’s TWS line) have huge market opportunities. Once MediaTek gets this large order, it will surely get a very significant income.