Taiwan firms urged to join China's smartphone boom

Increasing demand for smartphones in China should provide Taiwanese handset makers and the information technology industry great business opportunities, an industry insider said yesterday.

"Smartphones have become increasingly popular in the past few years as the life cycle of handsets becomes shorter and shorter," said Vincent Huang (黃富琮), president of Chinese Information and Communication Technology Co (CICT, 中華資通) at a briefing in China's handset market.

CICT is a local agent for the China Center for Information Industry Development (CCID), a research and survey institute under China's Ministry of Information Industry.

According to CCID's annual report on China's mobile phone market, the sale of smartphones has been rising 200 percent a year in the past four years to 1.3 million units last year, from 34,000 in 2000.

Sales could reach 12.9 million units by 2008, or 12.7 percent of the estimated 109.2 million mobile phones sold in China in that year.

Eyeing the potential boom, international handset makers like Samsung Electronics Co and Sony-Ericsson, as well as Chinese manufacturers such as Ningbo Bird Co (波導), the nation's No. 1 brand, have jumped into the market.

Intel Corp and Microsoft Corp are also pushing their products in China. Microsoft cooperated with Taiwan's High Tech Computer Corp (宏達電子), the world's largest personal digital assistant maker, to set up a research and development center in China last year.

"It's not just in China. Smartphones enjoyed an extremely high growth rate at around 150 percent to 160 percent globally," 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) in Taipei.

Taiwanese companies that would like to share in the boom could focus on developing operating systems and applications for Chinese users, instead of using the translated version of foreign-developed systems, she said.

Sales of handsets in China reached 73.8 million last year, an increase of 18.1 percent from the previous year, according to the report by CCID.

Ningbo Bird became the No. 1 mobile-phone brand in China with a 13.97 percent market share, followed by Motorola's 13.43 percent and Nokia's 13.34 percent.

The demand for handsets in China this year, the report said, may grow to 82.1 million units, 15.5 percent more than last year, and may increase at an average of 8.4 percent each year for the next five years.