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Communications makers' sales get boost from GPS

A model holds the latest of a line of PDAs developed by local electronics firm Dopod International Corp during a press conference in Taipei yesterday. The PDA weighs 126g, includes a global positioning system and costs NT$15,000. PHOTO: PATRICK LIN, AFP

Taiwanese communications device manufacturers will see sales grow by more than 20 percent next year due to rising demand for their products, including global positioning systems (GPS), a Taipei-based researcher said yesterday.

Sales of locally made GPS devices are expected to soar 30 percent to an estimated NT$72.2 billion (US$2.15 billion) next year from NT$55.8 billion for this year, making the gadget the second-largest contributor to local communications companies, according to the Industrial Technology Research Institute's (ITRI) forecast.

"A drastic price drop in portable GPS' has stimulated the demand this year, especially in Western Europe. As demand for built-in GPS' for autos is rising, the growth will extend to 2006," said Jill Chi (紀昭吟), an ITRI analyst based in Hsinchu.

The price for handheld GPS devices has plunged more than 30 percent from US$600 per unit to US$400, Chi said.

MiTAC International Corp (神達), the world's biggest aftermarket automotive GPS maker, expected pre-tax income for the fourth quarter of this year to more than double to as much as NT$1.5 billion from a year ago.

The firm's shares have almost tripled this year to close at NT$47.3 on the Taiwan Stock Exchange yesterday, up from NT$17.1 at the beginning of the year.

Local communications-product makers' sales will grow 21 percent to NT$600 billion next year from an estimated NT$494 billion this year, Chi said.

Sales from mobile phones, which make up more than a third of the total communications-product sales, will jump roughly 36 percent to NT$216.1 billion next year, benefiting largely from the world's top handset makers' extending into emerging markets such as India, Chi said.

"The growth rate will be sustainable as those global handset brands will increasingly farm out production of low-end handsets to local companies. Low-end models will make up the biggest part of local companies' shipments," the researcher said.

The average selling price, however, will drop to below US$50 per unit, she predicted.

Compared to the sales increase, growth for shipments next year will be much faster, at 60 percent, to 129 million units next year from an estimated 80.98 million units this year, according to Chi's forecast.

The world's two largest cellphone vendors, Nokia and Motorola, have already tapped into underdeveloped areas by selling ultra-cheap models, and Sony Ericsson Mobile Communications AB and LG Electronics Inc are set to enter those markets next year, Chi said.

Chi said entry-level third generation (3G) handsets would be the key products for firms who want to expand their global market share.

High Tech Computer Corp (宏達電子), which supplies handsets to some of the world's top mobile operators, started supplying mobile operators with its first 3G model with Microsoft's latest operating system for mobile phones last month.
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