Shipments of feature phones by local contract handset makers declined nearly 22 percent quarter-on-quarter in the third quarter because major customers like Motorola Inc have reduced orders and shifted focus to fast-growing smartphones, a Taipei-based researcher said yesterday.
The result came as a disappointment to Market Intelligence and Consulting Institute (MIC, 資策會產業情報研究所) because it expected local handset makers to prop up shipments further in the third and fourth quarters by landing more new orders from South Korea’s LG Electronics or Sharp of Japan.
The two mobile phone vendors were more aggressive in farming out production of entry-level mobile phones in a move to expand global market share, MIC said in September.
Dashing that hope, local cellular phone makers, including Compal Communications Inc (華寶) and Arima Communications Corp (華冠), shipped 9.1 million units in the third quarter of last year, down from 11.7 million in the second quarter, MIC’s report showed.
That represented a 59 percent contraction on an annual basis, MIC said.
As “branded customers adjust their product lines and change manufacturing partners, it is expected that Taiwanese feature-phone manufacturers will see further declines ahead,” MIC handset industry analyst Joyce Chen (陳釧瑤) said in the report.
Motorola, a major customer for Taiwanese handset makers, set a distinct example, Chen said.
The US-based cellphone company has shifted its focus to Android-platform products and has started using more chipset solutions from Taiwan’s top handset chip designer MediaTek Inc (聯發科) in low-end models, she said.
Those changes have cost local firms more orders, as they were less familiar with MediaTek’s chipset than their Chinese rivals, Chen said.
In addition, orders from Nokia and Sony Ericsson were also on the wane as their entry-level phones lost appeal, the report said.
Overall shipment value, however, dropped at a slower pace of 11.6 percent quarter-on-quarter to US$433 million in the third quarter as the average selling price rose nearly 12 percent to US$47 from US$42, MIC said.
Chen attributed the improvement to rising shipments of mid-range GPRS and EDGE models as well as WCDMA phones by contract handset makers Qisda Corp (佳世達) and Inventec Appliances Corp (英華達), MIC said.
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