Compal cuts its mobile-phone shipment target as China sales slump from SARS

Compal Electronics Inc (仁寶電腦), which makes mobile phones for customers including Motorola Inc and smaller Chinese rivals, said it cut its target for mobile-phone shipments after the SARS outbreak in China hurt sales.

Compal will ship about 1.4 million handsets in the first half, below an original target of 2 million. The company cut its goal after consumers in China stayed home to avoid the spread of SARS.

"There has been some impact on handsets in the China market," said president Ray Chen (陳瑞聰) in an interview following the company's annual shareholders' meeting.

"We're still expecting to ship 8 million handsets this year," he said.

Compal, the world's second-largest notebook computer maker, and rival Quanta Computer Inc (廣達電腦) have shifted to new products such as cellphones because their computer customers have been reducing prices.

In February, Compal said it would more than triple production of mobile phones this year, to 10 million handsets from 3 million last year, to offset declining margins in the laptop business. It said yesterday that it has compensated by selling more of its other products.