- With accelerating PDA (Personal Digital Assistant) sales prompting Palm, HPQ, and other international brand-name vendors to release new orders to Taiwanese suppliers in rapid succession, the Taiwanese PDA industry delivered a vibrant and impressive performance for the second quarter 2004. Demand for PDA Phone and GPS (Global Positioning Satellite) PDA is gradually increasing across Western Europe, and orders from operators and channel players in Western Europe have also registered a noticeable upturn.
As a result, the second quarter slow season was anything but slow for Taiwanese PDA suppliers. Total shipment volume reached two million units, which represents 15% growth over the first quarter and more than 50% growth over last year's second quarter, when the effects of the SARS outbreak were still being felt.
Second quarter shipment value grew by more than 60% year-on-year, racking up US$390 million; however, ASP (Average Selling Price) slid to US$186 due to changes in second quarter product mix. Although operators and channel players in Western Europe raised the shipment share of high-end models such as PDA Phone to 12%, vendors implemented heavy price cuts on value-line PDA models, which are nearing the end of their product life cycle. With these value-line models accounting for more than 40% of PDA shipment volume in the second quarter, ASP declined.
Looking back on the first half of 2004, in addition to the increased outsourcing from brand-name vendors to Taiwanese suppliers, another source of the spectacular growth can be traced to Taiwanese branded businesses. Fueled by branded output, Taiwanese PDA shipment volume reached 3.8 million units for the first half of the year, a 60% jump from the first half of 2003. The increased share of high-end models caused a near 50% increase in shipment value year on year, reaching US$720 million.
The forecast for the third quarter looks strong. With international brand-name vendors and Western European operators continuing to rollout new PDAs, and Taiwanese suppliers aggressively cultivating branded business, PDA shipment volume is likely to ascend to new heights, reaching as many as 2.5 million units.
The general global market for pure PDAs is shrinking, and the departure of Toshiba and Sony from the pure PDA market is expected in the second half of 2004. In an attempt to offset the effects from the withering pure PDA market, Palm and HPQ will also refocus a sizeable chunk of their production toward PDA Phone and Smart Phone. Palm and HP's strategic move into the arena of wireless communications is intended to challenge mobile phone vendors. The future of Taiwanese PDA suppliers will ride on their ability to integrate wireless technologies, such as GPS, WLAN (Wireless Local Area Network), GSM (Global System for Mobile Communications) and GPRS (General Packet Radio Service) in order to assist brand-name vendors in expanding their product lines.