Tue, Feb 03, 2004 - Page 10 News List

Smartphones put PDA makers in a pickle

MARKET ANALYSIS With demand for PDAs shrinking, domestic manufacturers are focusing on making devices that combine the features of both PDAs and cellphones

By Lisa Wang  /  STAFF REPORTER

The nation's personal digit assistant (PDA) contract makers will not feel immediate damage from shrinking demand for the handheld devices in face of the threat from smartphones, analysts said yesterday.

The analysts were responding to a Gartner Inc report showing lower PDA shipments last year.

Global PDA shipments declined 5.3 percent to 11.5 million units last year from the previous year due to the impact of smartphones and advanced phones, Gartner Inc said in a statement released over the weekend.

"I don't expect to see a quick impact," said Yang Hui-an (楊惠安), an analyst at the Market Intelligence Center (MIC, 市場情報中心).

"Some PDA makers did convert some of their manufacturing facilities for smartphones, but Taiwanese makers will be able to maintain their global market share in the short term, despite the dismal outlook for PDAs," she added.

With increased orders from international vendors, Taiwanese PDA manufacturers are expected to see that global market share grew around 20 percent last year from the previous year to around 54.6 percent, with 6.3 million units shipped during the period. That would represent an increase of 52.9-percent year on year, according to Yang's report released last Thursday.

Though the PDA market is shrinking, the demand for handheld devices that combine some of the functions of PDAs, such as personal information management, with cellphone service is growing, said Roger Lin (林峻毅), an analyst at Pacific Securities Co (太平洋證券).

That will give domestic PDA manufacturers an advantage in switching to that area as most manufacturers are capable of producing such devices no matter what they are called, Lin said.

"I'm not pessimistic about the outlook for local PDA makers," he said.

Motorola Inc's V-series smartphones, made by Taiwan's Compal Electronics Corp (仁寶) and its affiliate Compal Communications Inc (華寶通訊), are actually like PDAs, according to Lin. "V-series smartphones are powered by PDA operating systems, but with additional voice functions," he said.

Peggy Chang (張意珮), an analyst specializing in the smartphone industry at market researcher Topology Research Institute (拓墣產業研究所), disagreed with Yang and Lin.

"Smartphones will significantly eat into the PDA market due to the lack of new functions developed by PDA vendors, which will force local companies to extend business to other areas," Chang said.

Some handsets such as Sony Ericsson's P800 offer complete personal information management functions similar to a PDA's and can serve as an option for those who do not like PDAs, she said.

"That has reflected on local PDA original-equipment-manufacturing companies' revenue," Chang said.

High Tech Computer Corp (宏達電子), Taiwan's largest PDA maker, hopes its smartphone business can increase its sales contribution to around 40 percent this year, she said.

Global smartphone shipments are expected to jump to around 27.59 million units this year and surge to 80.6 million in 2006, according to Topology.

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