With tablet sales slowing, the smartphone market becoming saturated and PC sales having been anemic for years, many chipset makers have decided they need to race ahead to the next high-growth market, which is almost universally agreed to be the somewhat nebulous category of “wearables.” The most concrete products to come out of this category that are slowly gaining attention are wrist wearables such as smart watches and fitness bands. This is why MediaTek’s Marc Naddel, vice president of the recently announced MediaTek Labs, is willing to make such bold statements about the market’s future and his company’s involvement in shaping it.

“It’s going to be dynamic; it’s going to be fragmented; but the most important thing is that it will be a very large and significant market,” Naddel said of the nascent wearables market in an interview with Global Sources. “Those who are approaching it boldly with the appropriate products are going to be able to harvest these great opportunities, help develop it, help guide it and help drive new consumer behaviors with all these different products.”

Traditionally, MediaTek’s stronghold is China, where the company has found considerable success since it was founded in Taiwan in 1997. Small- and medium-sized manufacturers especially find good value in the company’s chipsets, leading MediaTek to become the world’s fourth largest fabless integrated circuit company in 2013, according to a report by IC Insights. Qualcomm, Broadcomm and AMD are the only others to generate more sales revenue.

Comments from Naddel made it clear that MediaTek has eyes on the broader global market and wearables from China could potentially serve as a bridge to that future.

“With so many manufacturers being based in China, this is a tremendous opportunity for us to use MediaTek Labs as an enabler as well as a partnering engine to create opportunities together globally,” Naddel said.

Other markets, Naddel noted, have been “quite dry for a long time” in manufacturing consumer electronics. If that changes, though, it creates an opportunity for MediaTek to expand its pool of potential partners.

While Chinese manufacturers already use MediaTek chips in a wide range of wearable devices, these are mostly makeshift modifications that allow companies to get products to market quickly in order to capitalize on new trends. The experience, though, is perhaps not the most refined. Like other chip makers, MediaTek realized it needed a specific strategy for wearables and designed the MT2502 chip, codenamed Aster, and LinkIt developer platform.

When MediaTek announced its Aster processor, it called it the “smallest wearable SoC [system on a chip] currently on the market,” measuring 5.4x6.2mm. The chip was not designed to be a powerhouse, but rather something small and efficient that can be stuck in specialized wearables and other network-connected devices driving us into the future of the Internet of Things or IoT. In the company’s vernacular, the Aster chip is meant to power “single” and “simple” application devices.

According to Naddel, single application devices are things like fitness bands and smart jewelry, and simple application devices are a little more sophisticated, possibly allowing for smartphone pairing and on-device controls. Smart watches like those running Google’s new Android Wear operating system are categorized as rich application devices and are not what the Aster chip is meant to address. For those, MediaTek has more sophisticated low-power chips like the MT7688.

Aster is getting much of the attention, though, possibly because it’s what MediaTek appears to focus on. With many companies now racing to capture lower-end markets, like the rapidly growing Indian market, betting on simpler and cheaper devices might be perceived as a shrewd move for a chip maker that isn’t yet found in many devices from top-tier brands.

Naddel made it clear that MediaTek has global ambitions. In fact, the impetus behind MediaTek Labs is to help foster innovation that could spring up anywhere, but the company is not counting out China, its mainstay market.

“We do have high hopes for innovation coming out of China,” Naddel said. “I think what we’re seeing is perhaps designs coming out of China that are China-first, that are looking at the specific requirements of the local users that are now very sophisticated and very tech savvy.”

Naddel used the example of Shenzhen-based Omate, a smart watch maker that is partnered with MediaTek. Xiaomi is another example that “everybody knows,” he said. Going forward, Naddel said he wouldn’t be surprised if the international market started seeing tech designs that were initially developed for the needs of Chinese consumers.

The Omate X smartwatch uses MediaTek’s MT2502A processor and boasts a week’s worth of battery life (Source: Omate)

See a comparison table of smartwatch manufacturers on GlobalSources.com