Nearly every Android device worth buying right now is powered by a Qualcomm chip. Period. Whether you’re talking about the HTC One or Samsung Galaxy S4 or Nexus 7, they all have one thing in common: Qualcomm. Unfortunately, Western markets aren’t growing as fast as markets in the East, which is starting to impact Qualcomm’s bottom line. According to Reuters, the company just announced revenue forecasts that were below expectations. More importantly, Qualcomm has said they’re going to grow operational costs (employees, research, etc.) by only 7% next year versus 20% a year prior.

What does the East have to do with Qualcomm’s misfortunes? There’s a company out there that doesn’t get a lot of attention called MediaTek. They basically do exactly what Qualcomm does, but at a fraction of the cost. Also, a significant part of Qualcomm’s revenue model is the licensing of patents. When companies sign a deal with Qualcomm to support a certain type of wireless technology, they agree to pay a small percentage of the price of the device being sold. The drop in average selling prices for smartphones is so vast that the increased volume is not enough to make up for the slack.

So now what? Qualcomm’s CEO, Paul Jacobs, told Reuters that:

“What we’re trying to do is focus on the highest-growth opportunities. We are investing heavily in the low end of the market to get our cost structure into a better place.”

There’s nothing wrong with that, in my opinion. This is a totally natural thing to happen in any market. Mobile phones used to be these $5,000 suitcase sized devices meant for the elite, but technological progress has enabled companies like Nokia to make $25 mobile phones. Same with smartphones. It used to be only geeks with a lot of disposable income bought one, but now you can get an astoundingly good smartphone for just $350 (Nexus 5) or even half that (Nokia Lumia 520).

Companies just have to adapt to the new reality.