As mobile phone vendors cut prices on camera phones 300,000 pixels and lower, camera phones accounted for over 40% of total handset sales. Camera phone sales jumped five-fold year on year and grew nearly 10% sequentially. Color display handsets also captured a 90% share of the Taiwanese market, doubling year on year and climbing over 10% sequentially.

In the third quarter, European and US vendors such as Motorola, Nokia, and Sony Ericsson supplemented their mid-range and high-end lines to ready for emerging replacement demand. Motorola rolled out a barrage of handsets while Nokia made prices more competitive. European and US brand-name vendors comprised nearly 50% market share, rising from 40% seen in the second quarter.

Samsung and LG increased value-line and mid-range models, focusing on the price range under NT$10,000 (US$296.7). Korean players registered a market share of approximately 20% in the third quarter. Taiwanese branded makers, besieged by various strategies from both Korean and European and US players, dropping to 23% market share.

In the fourth quarter of 2004, specification-driven demand is expected to subside with high penetration of color display handsets and camera phones. Multi-media content from partnering operators is likely to play a key role for handset vendors when expanding market presence. The Taiwanese market is also anticipated to see competitive focus make a stronger shift toward brand value and channel management. Taiwanese market size is expected to reach approximately 1.6 million units in the third quarter and 6.5 million units throughout 2004, increasing around 5% from 2003.