The merger of Taiwanese Ralink (TW:3534) and MediaTek (TW:2524) is signaling that yet more consolidation is going on in the wireless business space as these are two mid-sized players that are now teaming up to form a company with a solid enough portfolio to be a force to contend with. Ralink is already one of the major players in the Wi-Fi market space, but is seen as a budget brand while MediaTek has as yet to be taken seriously by any of the big mobile handset manufactures.
Ralink offers a wide portfolio of Wi-Fi solutions ranging from what they call “Router-on-Chip” to various chipsets for Wi-Fi and Bluetooth solutions to various xDSL chipsets. In as much as Ralink is a popular choice found in many routers, USB dongles and notebook across the world, its products are rarely found in high-end solutions. The company has a wide range of 3×3 MIMO Wi-Fi solutions and has also implemented support for Bluetooth 3.0 in some of its latest products. Ralink has gained a fair bit of popularity among the ADSL equipment makers with no less than a 20 percent share of the global xDSL chipset market.
MediaTek on the other hand has struggled in the Wi-Fi market and recently even in the mobile chipset market space due to lack of competitive solutions for higher-end devices. The company has so far mainly focused on 2G support, but that is about to change this year as the company introduced a wide range of new 3G/HSPA solutions at the Mobile World Congress. MediaTek has had good ties with the Chinese handset makers due to its low cost solutions and MediaTek is also building 3G TD-SCDMA solutions for the Chinese market.
MediaTek’s upcoming MT6573 baseband chip and MT6162 RF chip combine to produce an Android compatible platform which offers support for dual SIM cards, 3D graphics, high-resolution displays and every kind of connectivity that you’d expect to find on a modern smartphone. That said, we’re not expecting to see a huge onslaught of MediaTek based handsets for the time being as the company is still one of the minor players in this market space.
That said, the merger between the two companies is expected to bring new business opportunities as MediaTek can finally offer a complete in-house solution as far as main components in modern smartphones are concerned. The new company which will retain the MediaTek name is also looking at branching out into a wide range of new markets including games consoles, media players, tablets, TVs and just about anything where its chips would be a likely candidate.
The deal was a share swap of one MediaTek share for every 3.15 shares of Ralink which somehow looks like a bad deal to us, as MediaTek have been struggling in the past few months, while Ralink if anything has grown as a company. The merger is expected to be finalized by the end of Q4 this year and it has already been approved by the board of directors of both companies.
On a side note, Ralink has added support for Wi-Fi Direct in its latest Wi-Fi driver release, so if you own a Ralink Wi-Fi card, you might very well have gained free Wi-Fi Direct support.S|A
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