UPDATE (27th November 2014, 10:00 CET): MediaTek has denied reports that its relationship with Xiaomi broke down.
The dark satanic rumour mill manufactured a hell on earth rumour that MediaTek has stopped supplying chips to Xiaomi.
MediaTek is apparently cross that Xiaomi has been investing in SoC supplier Leadcore Technology. Xiaomi has reportedly reached a deal with Leadcore allowing the phone maker to get access to the chip designer's technology patents. DigiTimes however suggests that MediaTek has been trying to expand its presence in the mid-range and high-end market segments, but finds Xiaomi's pricing strategy is disrupting its plans.
MediaTek's MT6589T, a quad-core 1.5GHz chip, was originally designed to target mid-range and high-end mobile devices. The solution was introduced in Xiaomi's Redmi smartphone in August 2013. However, prices for the Redmi series have been cut to as low as $114.
Xiaomi is ranked as the third largest smartphone vendor worldwide in the third quarter of 2014. Xiaomi's shipments for the quarter registered a 211.3 per cent on-year jump boosting its market share to 5.3 per cent from 2.1 per cent during the same period of 2013.