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MediaTek partners with NavInfo

by on13 May 2016

Digital mapping service and 82.9% stake in AutoChips

Rumors that MediaTek might acquire Intel’s mobile division spiked a lot of conversations all over tech industry which, as we said, were  wrong. But MediaTek did announce a strategic partnership with NavInfo which is a Chinese-based digital mapping service provider and now an automotive chip manufacturer. 

This is a we told you so moment. We implied that MediaTek would announce an automotive design because we knew the company was in talks with others about automotive cooperation.

Intel announced that it is pulling back from smartphone business after years of failures and this seemed to create a strong disturbance in the force among most analysts. Industry insiders strongly believed that Intel will land a part of iPhone 7 modem business. We will talk about Intel's mobile plans some other time, but if it wanted to continue developing 5G it could not flog its 4G business. MediaTek has marketshare and a competitive product with its Helio X25 deca corte, mainstream Helio X10 and Helio P10. All of these products knock the spots off anything Chipzilla has in its Atom-based phones.

Digitimes reported that NavInfo will acquire AutoChips, in which MediaTek holds a 82.9 per cent stake, for a total of US$600 million. So we were right when we suggested that Mediatek was going to buy an autochips company – well at least a bit chunk of one.

The NavInfo and Autochips deal is a logical cause of action. To develop self driving cars and compete with Nvidia or Qualcomm in Automotive market, you need a mapping service. Audi, BMW and Daimler (Mercedes Benz, AMG and Smart brands) acquired one from Nokia a while ago, and it is a great alternative to the omnipresent Google maps.

NavInfo solves MediaTek's mapping problem, and will probably target Chinese market before it expands worldwide. According to MediaTek, NavInfo is China's largest and the worldwide Number three independent provider of digital maps, having led China's OEM in-dash navigation market for 14 consecutive years.

MediaTek will invest $100 US million in Navinfo to explore business opportunities in the vehicle networking and car electronics markets. MediaTek will then sell its majority stake in AutoChips (Hefei), formerly MediaTek's automotive electronics division, to NavInfo for US$497 million.

It is a complicated strategic partnership, but it will help MediaTek to position itself better to compete with Nvidia and Qualcomm in automotive business.

Last modified on 13 May 2016
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