Following the exit of Lite-On Technology from the mobile phone ODM business, Arima Communication has decided to discontinue supply of knocked-down handsets to China. Citing a cooler market from macroeconomic controls and intense price competition brought on from mounting handset inventories, Arima recorded a loss of NT$600 million, leading to after-tax losses of NT$640 million in the first half of 2005. The company intends to focus on smartphone and 3G handset ODM business, which Arima asserts will help it achieve its original 12 million-unit target for 2005.