The mobile-phone market is expected to be the first part of the telecom sector to rebound from the downturn, an industry insider said yesterday.
"Following an 18 month slowdown, we estimate worldwide sales of mobile handsets will rebound slightly by the fourth quarter of this year," said Dean Eyers, vice president of Gartner Dataquest Telecommunications Research Group, a US-based information-technology industry research center.
The mobile phone business suffered a hefty decline because of an economic slowdown coupled with a lack of new products to stimulate the market, he said.
But with a host of new functions, such as color screens, multi-chord tones and enhanced messaging services, consumers may soon be willing to replace their old handsets, Eyers said.
Gartner Dataquest estimates that global mobile phone sales for this year will be between US$400 million to US$440 million, up 13 percent over last year.
Another Gartner analyst said that sales of mobile phones in the Asia-Pacific region could reach US$163.2 million this year, a 15 percent increase over last year's US$134 million.
"Taiwan's replacement market for advanced mobile phones still has a lot of room to grow," said Ann Liang (
Few mobile users in Taiwan have color screens or poly sound handsets, she said.
Attracting consumers with new features
"Once mobile phone and service ventures spark public interest in new services, mobile-phone purchases should rise," Liang said.
Local handset manufacturers will benefit from the rebound.
"As demand increases, Taiwan's OEM [original equipment manufacturing] handset manufacturers, such as Inventec Co Ltd (英資達) and GVC Corp (致福) will get more orders as well," she said.
Handset companies such as Sony-Ericsson have decided to focus on design and marketing rather than manufacturing in an effort to cut costs, Liang said.
Following the handset market's recovery, mobile-service operators are set to rebound later.
"After consumers start to send short multimedia messages, play online games and download ring tones on advanced handsets, mobile service operators should be able to boost revenue from these new services as well," Liang said.
"We expect the mobile-service market to report improved performance early next year."
Since the nations' mobile-service penetration rate is extremely high, gleaning increase revenue from existing users is a more feasible strategy than pursuing new subscribers, she said.
Nevertheless, infrastructure builders are likely to be the last to recover.
"The slow business environment for network-equipment vendors won't end before 2004," Eyers said.
Most telecommunication service providers have over-invested in infrastructure, making this year and next year difficult for equipment vendors and service providers, he said.
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