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Communications companies sales will rebound: ITRI

Communications companies' revenues are expected to rebound 24 percent this year, supported by new orders from global mobile phone vendors and strong demand for global positioning system (GPS) devices, a local market researcher said yesterday.

Local communications companies' sales are expected to recover from a slump last year and reach NT$907.5 billion (US$28.6 billion) this year, a report by the government-funded Industrial Technology Research Institute (ITRI, 工研院) said.

"The nation's communications industry is recovering in 2008 from the bottom last year, as Taiwanese companies begin to diversify customers, learning from last year's lesson," the institute said.

Local companies are also expanding into emerging markets, Hsinchu-based ITRI said.

Cal-Comp Electronics (Thailand) Public Co, a wireless device unit of local electronics group, Kinpo Group (泰金寶), has landed orders from India's No.3 telecom operator, Reliance Communications Inc, it said.

The institute attributed the 25 percent annual drop in cellphone shipments last year to 108 million units to a decline in orders from Motorola, who works in close partnership with several local firms.

Compal Communications Inc (華寶通訊), the major supplier of Motorola, lowered its estimated shipments last year to 55 million in light of weak customer demand, compared with shipments of roughly 68 million units in 2006.

The decline in orders caused local communications companies to post growth of less than 5 percent last year, compared with 42 percent in 2006 and 23 percent in 2005, the report said.

Wireless devices made up a major part -- or nearly 70 percent -- of the total revenues made by the nation's communications companies last year.

For this year, with handset orders forecast to recover and robust demand for GPS products from developing companies, local communications companies should regain their "normal growth momentum," the institute said.

"The growth for the GPS industry will be high this year," ITRI said, without giving a specific forecast.

Local GPS makers, led by MiTAC International Corp (神達), shipped about 38 million devices last year.
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