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MiTAC takes aim at pedestrian GPS sector

MiTAC International Corp (神達集團) unveiled its latest GPS phone yesterday, the Mio Leap K1, which features a pedestrian GSP navigation system and extra cellphone capabilities.

The phone has dual screens: a 1.7 inch screen in the front for phone services and another 2.6 inch screen on the back dedicated to the GPS system.

“Mio users can simultaneously talk on the phone and find directions without ever losing their connection, through its embedded advanced sensors,” said Steve Chang (張樂群), senior director of the marketing center office at Mio Technology Corp (宇達股份有限公司), a MiTac subsidiary.

The phone has a more precise location identification for pedestrians moving at slower speeds, thereby overcoming previous obstacles that had location identification feasible only for vehicles, he said.

Weighing 125g, Leap KI, which runs on Windows CE system, will retail for NT$12,800 (US$421) when it goes on sale domestically next month.

The Leap K1 is MiTAC’s sole venture into the pedestrian GPS market. It has a series of five Mio Moov products for the traditional car GPS market coming out in the second half of this year.

John Cheng (鄭若望), a market analyst at IDC Taiwan, expressed concern yesterday over the growth potential for the local smartphone market.

“Figures show that in Taiwan alone, sales of handset devices are relatively stable, meaning that there is literally little to no growth,” he said.

“We are looking at on average 7 million units of sales per year, or roughly 1.8 million units per quarter,” he said.

Globally smart phone or converged device takes up only 9 percent to 10 percent overall cellphone market, Cheng said.

“Most people primarily use their handsets as phones. The exorbitant monthly carrier, voice and data fees and high device unit cost are two reasons people are staying away from using converged devices,” he said.

Cheng said MiTAC remains Taiwan’s largest GPS mobile device manufacturer, despite competition from AsusTek Computer Inc (華碩) and HTC Corp (宏達電).

Whether buyers for Leap K1 will come primarily from the traditional cellphone market or from the GPS market is not yet clear.

But Kirk Yang (楊應超), former head of Asian technology hardware research with Smith Barney Citigroup and now CFO at Ta Yang Group(大洋集團), is optimistic about the new product’s chances.

As new products always have high profit margins, Yang said it was important for companies to be the first to come up with devices catering to the ever-changing needs of mass consumers in the critical first three to six month period.

Yang said MiTAC seems to be ahead of the game this time with the Mio Leap K1.

“By coming out with a new product or product focus, MiTAC is targeting an untouched market segment,” he said.

“This strategic move is very clever and could be extremely lucrative,” he said.

MiTAC closed up NT$0.40, or 1.9 percent, at NT$21.40 yesterday in Taipei trading.
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