HP moving aggressively into phones

STRATEGIC: A Hewlett-Packard executive said that sales of the company's personal digital assistants were down, prompting a move into devices with phone functions


Tue, May 16, 2006 - Page 12

Hewlett-Packard Co (HP), the world's second-biggest computer vendor, yesterday unveiled three new mobile phones in Taiwan, speeding its expansion into the communications sector after much deliberation.

The US computer giant debuted its first mobile phone last summer. HP's latest move came after global sales of its personal digital assistants (PDA) declined for a ninth straight quarter.

"We are conservative about PDA sales ... But we are seeing significant growth for PDA phones," said Dennis Chen (陳敬宏), vice president of HP's Taiwan branch.

Popular functions

Chen made the comments on the sidelines of the launch of the new phones, which run Microsoft Corp's latest mobile operating system and boast the popular direct push e-mail function, giving the devices the ability to receive e-mail wirelessly without incurring additional middleware expenses.

Chen said sales of PDA phones would double at an annual rate for the next few years, without giving a detailed forecast.

HP wants to profit from this strong growth, Chen said. The company plans to roll out as many PDA phones as other mobile devices this year, he said. Last year PDA phones accounted for just 10 percent of HP's handheld devices.

Talking about the company's strategies, Chen said HP would focus on phones with added functions such as global positioning systems, rather than on entry-level handsets like mobile phone maker Motorola Inc.

HP aims to usurp Dopod International Corp (多普達) and secure the top spot in the local PDA phone market, he said.

5 percent share

Mobile phones priced above NT$15,000 (US$474) (such as PDA phones), would make up 5 percent of the total sales of 1.87 million units in the first quarter, according to Taipei-based researcher Market Intelligence Center (MIC, 資訊市場情報中心).

"HP's resumed expansion into the cellular phone market will benefit Taiwanese manufacturers, which keep close relations with HP," said Molly Lin (林美如) of Polaris Securities Co (寶來證券).

High Tech Computer Corp (宏達電), the world's biggest maker of mobile phones operating on Microsoft's mobile operating system, and Quanta Computer Inc (廣達電腦), the world's biggest contract notebook computer maker, are two of HP's major mobile phone suppliers, according to Chen.

Taiwan produces most of the world's PDAs. Four out of five PDAs used around the globe are made by Taiwanese companies, according to MIC.

The researcher forecast that local companies would ship around 18.47 million PDAs and PDA phones this year, up 37 percent from last year.