Dealers say cellphone prices near bottom

Waiting for cellular phone prices to drop before buying a new model? According to telecom industry pundits, now is as cheap as they are going to get.

"Prices of the [mid-level] popular handsets in market won't get much lower," said Alex Li (李建志), product marketing manager of Motorola Taiwan Ltd.

And with 70 percent to 80 percent of the population already in possession of a handset, demand for new models is low.

Add to that the fact that the economic slowdown has seen consumers tightening their belts, many are likely waiting for prices to drop.

But the price-cycle of cellular phones in Taiwan is generally six months from the initial launch to the final bottom price at retail outlets.

"Prices of popular models launched around Chinese New Year -- such as Nokia's 3310, Motorola's 7689 and Ericsson's T29 -- have dropped by about 25 percent within the last six months," said Flora Tang (唐淑貞), product manager from Arcoa Corp (全虹通訊), a major handset chain-store operator in Taiwan.

And while some medium-priced handsets are a "buy" according to pundits, don't hold your breath for premium phone prices to drop.

"Premium models, for example Nokia's 8850 and Motorola's V8088, won't get much cheaper," Tang said.

Premium models have strong sales records and therefore they usually aren't discounted, Tang said.

As for the more popular models, rather than letting the stock stack up on store shelves, retailers often flog them via promotions ranging from model exchange offers to bundle packages that include a phone service agreement. Since most people already own a cellular phone, manufactures are now focusing on selling the latest models to users.

While the majority of cellular phones currently in use are GSM or Global System for Mobile communication, phone makers say GPRS or General Packet Radio System phones are just around the corner.

"For the next six months the market will focus on GPRS handsets, which will be commercialized in September or October," said Motorola's Li.

KG Telecommunications Co Ltd (和信電訊) has had its GPRS service up since March and Chunghwa Telecom Co Ltd (中華電信) is next in line.

"We will start our service next week," said Shih Mu-piao (石木標), deputy chief engineer at Chunghwa Telecom.