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Qualcomm goes after MediaTek with low-end LTE chip

While MediaTek has been gunning for Qualcomm's core business in the higher-end market, Qualcomm looks to be playing a similar game, attacking MediaTek's territory in the low-end market.

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A battle between Qualcomm and MediaTek continues to brew. Stephen Shankland/CNET

Qualcomm appears to be taking a direct shot at rival chipmaker MediaTek, introducing on Tuesday a new mobile processor aimed at lower-end devices -- MediaTek's bread-and-butter business.

San Diego, Calif.-based Qualcomm unveiled the Snapdragon 210, its first chip focused on bringing 4G LTE to entry-level smartphones and tablets. The processor could help Qualcomm in its effort to expand in emerging markets -- such as China, India and Latin America -- where MediaTek has developed a strong base, as more and more consumers in those countries purchase smartphones.

Additionally, Qualcomm said Tuesday that it will start offering technical blueprints, known as reference designs, for LTE-enabled tablets, as it looks to coax more device makers to use its chips in their gadgets.

Qualcomm's new focus on low-end devices could be seen as a response to MediaTek expanding into Qualcomm's territory. Qualcomm is the largest maker of smartphone chips by shipments and has a dominant position in high-end mobile devices, but industry watchers see Taiwan-based MediaTek as its biggest competition in wireless chips. MediaTek managed to grow rapidly by focusing on the low-end market in emerging regions, a high volume but low profit business. MediaTek now is looking to spread out into higher-end devices, this year introducing beefed up processors offering top-of-the-line features.

Also, Qualcomm's new push into the low-end is partly a way of capturing the rapid growth in emerging regions to balance out softer growth in mature -- though more profitable -- Western countries, where smartphones sell for more money but many people already own the devices. Still, that effort has brought risks: The Chinese government is investigating Qualcomm over potential antimonopoly practices and the company in July revealed it believes some of its Chinese licensees are underreporting their sales, which cuts into on Qualcomm's royalty payments.

The Snapdragon 210 processor provides more power efficiency and higher-level performance for entry-level devices, including LTE -- a newer standard that offers broadband speeds over wireless networks. The chip could help Qualcomm become more competitive in China, where consumers are quickly adopting 4G technology.

Also, Qualcomm has for years offered reference designs to device makers for phones but is now expanding into tablets, with its first LTE tablet blueprint introduced Tuesday. This offering could help it counter MediaTek, which offers many reference designs for both phones and tablets already, and also Intel, which has been working to grow in mobile devices and has seen some gains in tablets.