Palm and Dell seek PDA partners to cut their production cost

A woman holds an Eten's InfoTouch series financial PDA, a Chinese-language GPRS pocket PC, that will be displayed at the Taipei Computer Applications Show from Thursday to Aug. 5 at the Taipei World Trade Center Exhibition Hall. The trade show is open to the public and the entrance fee is NT$200 per person. PHOTO: GEORGE TSORNG, TAIPEI TIMES

Palm Inc and Dell Computer Corp, the world's largest sellers of personal digital assistants (PDA) and PCs, respectively, are turning to Taiwanese manufacturers to produce their PDAs in an effort to reduce production costs, sources said yesterday.

Palm is in talks with a host of companies including Asustek Computer Inc (華碩電腦), Inventec Corp (英業達) and Wistron Inc (緯創資通), the former manufacturing arm of Acer Inc (宏電), to manufacture its top-selling line of Palm Pilot PDAs, sources said.

Dell, which plans to enter the PDA market before the Christmas buying season, will source up to 1.5 million PDAs from one or more Taiwanese companies, which could include Compal Electronics Inc (仁寶電腦), High Tech Computer Corp (宏達電腦), Mitac International Corp (神達電腦) or Wistron, local Chinese-language newspapers reported yesterday.

Dataquest predicted that PDA sales will rise 18 percent over last year to 15.5 million units. Manufacturers predict that consumers will want to upgrade to new color models with added telephone functions. Spending on the devices is expected to rise by more than 20 percent to US$4.6 billion.

World pda manufacturing leader

Orders from Palm and Dell would solidify Taiwan's place as the lead manufacturing center in the PDA sector. Production of Internet appliances, including PDAs and game consoles, is expected to grow 140 percent this year in Taiwan, according to the Market Intelligence Center, the research arm of the Institute for Information Industry.

Interest on the part of foreign companies in finding PDA manufacturing partners in Taiwan has risen recently, the center said.

It predicts that production will growth of 209 percent in the second half of this year, compared to just 61.4 percent in the first half of the year.

First International Computer Inc (大眾電腦) and Mitac International have already reported orders for the PDAs they displayed at the Computex Taipei 2002 trade show.

Most of the parts needed to build a PDA are already made in Taiwan, Japan and China.

Profit margins on PDAs have already slipped to 15 percent from over 20 percent earlier this year, officials from Compal Electronics said.

The company believes that moving production to China will help to reduce its production costs.