Nokia Oyj, the world's largest handset supplier, may contract BenQ Corp (
Nokia, which has been cautious about farming out handset manufacturing in recent years, may place an unspecified order to Taiwan's largest handset maker after the Finnish mobile phone vendor severs its partnership with its current phone provider, South Korea's Telson Electronics Co, analysts said.
"BenQ will be Nokia's first pick as the Finnish company tries to switch suppliers over cost concerns after its contract with Telson expires," said Chou Chi-shian (周奇賢), a mobile phone analyst at SinoPac Securities Corp (建華證券).
Chou was responding to a Chinese-language newspaper report saying that Nokia has requested BenQ, Compal Communications Inc (
Nokia started to place orders for CDMA-based phones with Telson after tapping into the CDMA market in mid-2002.
Chou said BenQ is one of the few Taiwanese handset makers that is both capable of producing CDMA-based phones and able to ship large volumes of mobile phones in one run.
"But the volume will be small, due to Nokia's small share of the CDMA phone market," he said. Nokia, a new entrant in the market, grabbed a less than 3 percent share in that area, he added.
According to Chou, Nokia had intended to engage in a strategic alliance with BenQ in 2002, but hesitated to do so because of concerns over the Taiwanese company's close relationship with Nokia rival Motorola Inc.
Motorola was then the biggest customer of BenQ. But the US company is switching orders to other local handset makers, including Compal Communica-tions, a subsidiary of Compal Electronics Inc (仁寶電腦), and Chi Mei Communication Systems Inc (奇美通訊).
"As BenQ's partnership with Motorola is vanishing, there should be some progress beign made," Chou said. The analyst predicts BenQ will have shipped about 12.6 million handsets in 2003 and will suffer a huge setback in shipments in 2004, to around 7 million units, after losing its biggest customer, Motorola.
BenQ dismissed the newspaper report yesterday.
"We did not receive any requests from Nokia. And we can't comment on anything about our customers," said Alex Liou (劉維宇), a deputy spokesman of BenQ.
"Currently, Nokia is not our customer," Liou stressed.
BenQ started to ship CDMA-based mobile phones more than two years ago, exporting most of them to South America and China. Shipments have been quite small, accounting for less than 5 percent of BenQ's total handset shipments this year, Liou said.
But Benny Lo (
"To strengthen its Chinese CDMA-based phone market, Nokia is very likely to outsource low-end models to Taiwanese companies.
And BenQ has the biggest chance of winning, followed by Compal Electronics," Lo said.
Compal Electronics, Taiwan's second-largest notebook computer maker, said there still was a long way to go before talking about receiving orders from Nokia, according to a company official, who requested anonymity.
The company said it expected to have shipped 1 million CDMA-based mobile phones, largely to China, in 2003.
Arima does not produce CDMA-based handsets, but will not rule out the possibility of developing them in the future, said Howard Huang, (
CDMA is the second most widely-used wireless network standard in the world behind GSM, in which Nokia holds a strong market position. CDMA cellphones, mostly used in North America, Japan, South Korea and parts of China, only constitute 20 percent of the global handset market.
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