Shipments by Taiwanese mobile phone makers are expected to fall by 5 percent amid weakening demand from emerging markets and rising competition from electronics manufacturing service (EMS) providers, a Taipei-based research house said yesterday.
Total handset shipments could drop slightly to 130 million units next year, compared with 137 million units forecast for this year, according to the Market Intelligence Center's (MIC,
That would also mean local companies would supply 12.4 percent of the world's mobile phone sales of around 1 billion units next year, down from a 14 percent estimate for this year.
Taiwanese handset makers, or original design manufacturing (ODM) companies, were benefiting from significant market gains by global mobile phone vendors through the sale of more low-priced models to emerging markets this year, MIC analyst Jeffrey Tai (戴基峰) said.
ROBUST DEMAND
Backed up by robust demand in the emerging markets, shipments by local mobile phone makers will jump 58 percent this year at an annual rate, according to MIC's projection.
"But the growth in the emerging markets will slacken in 2007, which will lead to a decline for local companies," Tai said.
Some global handset brands such as Motorola Inc diverted low-priced model orders to EMS companies, such as Hon Hai Precision Industry Co (
Motorola's major Taiwanese handset supplier Compal Communications Inc (
"The competition from EMS companies will be more intense as low-end phones will continue to make up a big chunk of local ODM shipments in future," Tai said.
EMS companies are proficient at mass manufacture of electronics at a lower cost than ODMs but can suffer from weaker design capabilities.
EMS firms are adjusting their business models, however, by improving design capabilities to win more orders, Tai said.
FAST-GROWING
To sustain growth, Taiwanese handset ODMs are turning to fast-growing smart phones and personal digital assistant (PDA) sets that run on Microsoft Corp's Windows operating system.
These needed complicated design and manufacturing capability, he said.
DIVERSIFYING
Local companies -- including Inventec Appliances Corp (
Global sales of smart phones and PDA phones are expected to rise 45 percent and 25 percent respectively at an annual rate next year. This would outpace the overall figure of 9.4 percent growth, MIC predicted.
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