Mobile-phone sales in China, the world's biggest wireless market by users, dropped almost a 10th in April because the SARS outbreak sapped demand, a government report released yesterday showed. Motorola Inc lost its leading position to rival Nokia Oyj.
Nokia, Ningbo Bird Co (
The April numbers are the first to reflect the full impact of SARS on China's cell-phone market, which is already suffering because of rising inventory and falling prices.
Motorola, which blamed SARS last week for its decision to cut its full-year profit forecast, sold 24 percent fewer global system for mobile communications, or GSM, phones in April than in March. The US company, the world's second-biggest mobile-phone maker, estimated vendors have 20 million unsold phones in China, almost a third of the country's annual sales.
"The fall in sales because of SARS shouldn't be too big a surprise for the market," said Lily Jap, an analyst at Nomura International (Hong Kong) Ltd. "The key question is how much sellers will allow price cuts to drive sales, especially of phones equipped with colored screens, in the second half."
Sales of GSM-based phones, China's dominant cellular standard, dropped 7.7 percent in April to 6.28 million units, according to the CCID report. By value, they dropped 13 percent to 9.63 billion yuan (US$1.2 billion). That implies the average price of a GSM phone, used by more than 95 percent of China's cell users, dropped 5.8 percent to 1,534 yuan.
TCL Mobile Communication Co, China's No. 2 domestic cell-phone maker, and Konka Group Co are among makers that dropped prices in April. Konka slashed prices of its C869 handset by 37 percent to 1,890 yuan.
Finland-based Nokia, the world's biggest handset maker, increased its share of China's GSM market to 15.3 percent in April from 13.4 percent in the previous month. Schaumburg, Illinois-based Motorola's fell to 14.1 percent from 17.2 percent, the CCID report said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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