- Despite two consecutive quarters of record shipments, global mobile phone shipment volume hovered at 150 million units in the second quarter of 2004, driven by demand in emerging markets such as Brazil, Russia, and India. Although Nokia drove down handset prices for larger market share, its position in the mid-range and high-end segments was undermined by offerings from Motorola, Sony Ericsson, and Samsung. Additionally, Samsung is aggressively rolling out mid-range and value-line models, and Siemens and LG also adopted low-price strategies. Therefore, Nokia is expected to only push its market share up to 30% in the second quarter of 2004.
Taiwanese makers continued to fill in the gap in mid-range and value-line handset production for Motorola, Sony Ericsson, and Panasonic. Second-quarter shipment volume thus reached approximately 12.6 million units. This represents a five-fold rise compared with the SARS (Severe Acute Respiratory Syndromes)-affected second quarter of 2003. Taiwanese share of global mobile phone shipments stood at 8.4% in the second quarter of 2004.
Boosted by volume growth, Taiwanese mobile phone shipment value reached US$830 million, climbing 50% year on year yet falling 16.5% sequentially. ASP (Average Selling Price) cascaded to US$66 due to short-term changes in product mix, business types, and assembly levels. Value-line GSM (Global System for Mobile Communications) dual/triple band models remained the mainstream, accounting over 60% of Taiwanese handset shipments. Share of Smartphones dropped to under 3%.
As the older generation of mid-range camera phones were phased out of the market, they were squeezed by price reduction by Nokia, further depressing prices of mid-range and value-line models in the Taiwanese market. In the second quarter of 2004, Taiwanese branded shipment share slid from nearly 20% in the first quarter to 10%, due to increased challenges in channels of China and emerging markets. In addition, share of full systems and SKD (Semi Knock-Down) rose in response to the gray market in China and high tariffs imposed by Brazil.
Impacted by falling orders for knock-down kits to China, Taiwanese mobile phone shipment volume reached approximately 25.2 million units in the first half of 2004, growing 34% year on year. The growth momentum failed to surpass the 67% registered in the first half of 2003, which saw shipment volume stand at around 18.8 million units. As Taiwanese makers strengthened their foothold in the branded segment, total first-half shipment value was approximately US$1.8 billion, climbing 42% year on year from around US$ 1.3 billion.
In the second half of 2004, Western Europe and North America are entering slow retail season while China and India are experiencing weakening demand for new handsets. Demand in the global market is thus expected to hover at a similar level. Taiwanese mobile phone shipment volume is anticipated to edge down 1% sequentially to approximately 12.5 million units in the third quarter of 2004. This lackluster performance is attributed to a combination of factors. Taiwanese branded businesses face challenges in overseas markets such as Western Europe, India, and Southeast Asia. Motorola will be in the process of transferring production to new outsourcing partners. Meanwhile, makers will also be transitioning to new models for Sony Ericsson.