Mobile Communications - Lite-On Exiting Mobile Phone Market
June 17, 2005
Lite-On on June 15 decided to end its mobile phone activities starting on July 1, 2005. A company spokesman mentioned lowering prices of mobile phones and shorter life spans of consumer electronics products in general as reasons for the market exit. Although new orders will no longer be taken, work on existing orders will still be finished.
In 2004 the company's mobile phone division generated revenue of approximately NT$2.1 billion (US$66.88 million; US$1=NT$31.4), which accounted for 3.5% of the company's total revenue. In 2004 it had a mobile phone shipment volume of five million units. Main customers include Siemens, LG, Alcatel and Nokia. The company had forecasted that in 2005 shipment volume would reach 10 million units.
Besides reasons given by the company, the recent deal between BenQ and Siemens shows that large production capacity is quickly becoming an essential element in the Taiwanese mobile phone industry. As Lite-On's production capacity is significantly smaller than that of BenQ and Foxconn, Lite-On faced the prospect of slowly being pushed out of the industry by its bigger rivals.