There are almost 7 billion people on the planet, only 1 billion or so of whom have a smartphone. That means 6 billion people do not have one. The biggest tech company you’ve never heard of wants to flip that statistic, and in so doing make 2013 the year it brings the world online.

MediaTek is the largest mobile chipmaker in Taiwan. Its chips power devices from the likes of Lenovo, Sharp and Acer, as well as Chinese giants like ZTE and Huawei. It generated about $3 billion in revenue last year selling chipsets for some 500 million phones, easily eclipsing Samsung, HTC and Apple in total volume. Yet few know who MediaTek is.

"We are," says Finbarr Moynihan, who runs new business for MediaTek, "one of those best-kept secrets."

That will soon change, because MediaTek wants to fundamentally remake the global phone business.

The company doesn’t sell phones under its own name. Instead, it supplies what it calls “reference designs” – which include the chip and the operating system, camera, display and more – that need little more than polish and personalization from the manufacturers branding and selling them. MediaTek intends to take that formula, which has worked exceptionally in the feature-phone market, and apply it to smartphones.

In 2013, for the first time ever, global smartphone sales will exceed feature-phone sales – an area MediaTek has thoroughly dominated in China and South Asia. Most of those sales will be in the developing world, where unsubsidized smartphone prices are expected to fall to $50. But MediaTek is going after both ends of the market, with a plan to sell high-end phones as well. It is rolling out fast chipsets and gorgeous displays so handset manufacturers can target the emerging global middle class. If MediaTek can pull this off, it’s going to flip the smartphone-to-feature-phone global equation, boost Android handset sales by an order of magnitude, and bring hundreds of millions of people online, many for the very first time.

Perhaps the one thing more impressive than MediaTek’s vast size is the speed with which it grew. The company was founded in 1997, spun off from the R&D arm of giant Taiwanese chipmaker UMC. It initially made chips for optical drives in computers and home stereos, and remains the world’s largest chipmaker in that segment. It expanded its operations into Wi-Fi, televisions and, most notably, mobile phones.

MediaTek quietly entered the mobile phone business in 2004, making chipsets that powered mobiles in China. Then it moved into the emerging markets of Indonesia, India, Brazil, Russia and more. Today, it is a feature-phone colossus.

Cheap handsets that offer only the most rudimentary features and run only the most basic apps comprised about 70 percent of global mobile sales in 2012. But MediaTek is betting that end users are ready to make the leap to smartphones, based on both hardware costs coming down and the rollout of 3G networks. Within four years, MediaTek estimates, the market for unsubsidized smartphones that cost $200 or less will be in the neighborhood of 730 million units.

And the subsidization issue is key. In China, and much of the rest of the world, phones are sold in retail shops you find in strip malls and markets, not the Chinese equivalent of an AT&T store run by a telco. These phones aren't subsidized by carriers, so price is a prime concern. The phone and SIM often are purchased separately.

Go to a mall anywhere in China or the developing world and you'll see a staggering array of form factors from manufacturers you've never heard of. To some extent, this is a reflection of necessity. Networks and needs vary from place to place – for example, customers may want a phone with multiple SIM cards for different carriers – so phones are built to suit local needs. MediaTek pioneered this approach in China, where it fueled the market in off-brand mobile phones. As it expanded internationally, that model turned out to be well-suited for a global scale.

"A lot of this stuff is consumer use case developed because of the retail aspects of those countries," explains Moynihan.

One of MediaTek’s biggest selling points has been flexibility. Operating at enormous scale, MediaTek can pack lots of features into its phones at lower cost than manufacturers operating on a market-by-market basis. It can deliver cheap phones with rich multimedia experiences, while letting local brands to do the hard work of establishing identity and consumer recognition.

For example, because it isn't beholden to carriers, its phones have long supported multi-SIM and dual band. This is essential in markets where consumers might use different SIMs to call different people, or different countries, or at different times. In some markets, like Brazil, MediaTek phones might have as many as four SIM slots.

The company plans to take the cooperative model that made it China’s biggest supplier of mobile phone chips and apply it to smartphones. The company sells hundreds of millions of feature phone handsets each year. Now it wants to flood the world with affordable Android smartphones, localized to suit particular markets. It developed a powerful quad-core chipset for use in phones that will compete with high-end models from the likes of Samsung and LG, yet sell for as little as $200. Don’t have that kind of cash? No problem. MediaTek has single and dual core chips too, so it can hit lower price points.

“MediaTek has created a barbell market for the global smartphone market,” explains Gartner analyst Mark Hung. “There is growth on the high-end, and significant growth on the low-end.”

The low end is no less important than the high end. Apple operates at the high end. Although it doubled iPhone sales in China during the last quarter of the year, it is in sixth place there overall, according to IDC. It trails Samsung, China Wireless Technologies, ZTE, and Huawei – the last two of which use MediaTek designs.

What that means is, when hundreds of millions of people around the world pick up their first Android handset this year to make a call, send a text, compose an email or download a movie, they’ll have a MediaTek phone in their hand, though it might carry another company’s logo.

"We are democratizing the smartphone," Moynihan says, "bringing the premium experience in much more cost effective platforms."

Beyond being cheap to buy the company designs its phones to be cheap to use as well. For example, smart dialer software ensures that when you call someone's number, your phone connects with the SIM from the same network that number is on. They automatically swap to WiFi to suck down data, and some are even designed to work on 2G platforms and use WiFi only for web browsing. They have built-in power-management features, like a low energy display, to maximize battery life, a key consideration in areas where plugging in isn’t always an option.

This strategy has been a huge success. MediaTek shipped 550 million feature phone chipsets in 2011 and 10 million smartphone chipsets. It shipped another 400 million feature phones last year, but while that declines, it sold a full 110 million smartphone chipsets. And now it thinks the market is about to flip completely.

"I think 2011 should be the peak of the feature phone in volume sales," says MediaTek president Ching-Jiang “C.J.” Hsieh.

To put it more bluntly, MediaTek wants to muscle in on the smartphone market players like Samsung and LG currently control. It's already the biggest smartphone chip supplier in China, where its chipsets power some 30 to 50 percent of the smartphone handsets sold last year, according to analyst estimates. And while that may be bad news for Samsung, it's very good news for Google's Android operating system, and even better for consumers.

"In the past we focused on the feature phone so we provided our own ecosystem to the customer including our own platform. For the smartphone – it's an open system requirement – so that is why we focus on the industry's most popular platform,” says Hsieh. “In the beginning we supported Windows OS, but maybe it's not so successful for our customer, so we moved to Android platform."

Going Quad-Core

This year at CES, MediaTek showed off a MT6589 handset. The screen looked great. The camera shot pictures impossibly fast. Apps fired quickly, and while it was no Nexus 4, the phone was as good or better than the bulk of Android phones and far faster than the clunky iPhone 4S in my pocket. It was appealing, and even at $150 or $200 off contract, seemed like a bargain.

There’s a good reason why customers in the developing world may be ready to splurge on a nice handset. Often, the phone quite often is the only Internet-connected device in a household. It must have a display large enough to compose long messages on, or read the day’s news. It may well be the household’s sole media player, and may even double as a television. It’s a camera, an e-reader, a web browser. It’s truly an all-in-one device, the mobile communications, entertainment and Internet center for a large percentage of the world’s people.

"Someone in Indonesia, they may want a nice [smartphone] camera because it is their camera," explains Moynihan. "In India it may be the only device for watching movies."

And ultimately, that’s what’s so exciting about the democratization of the smartphone. Sure, it may be good for MediaTek, or Android, but ultimately the 450 smartphone, and even the $200 smartphone are good for humanity. It isn’t about MediaTek being a big company, or one that makes cheap phones, or even that it sells them by the boatload. It’s the consequence of targeting the 5.8 billion people in the world who don’t have a smartphone. The ultimate effect is MediaTek and companies like it will bring the world online, a few hundred million people at a time.

If it can flip the equation, if it can get smartphones to outsell feature phones, it will be one of the biggest product success stories of the year, and maybe even a global communications revolution, again.