Nokia saw its market share rebound to over 30% by continuing to aim value-line handsets toward emerging markets, and mid-range and high-end models toward Western Europe and China. Motorola, while rolling out diverse handsets, underwent adjustments in product lines. Combined with erosion from Korean vendors in the CDMA (Code Division Multiple Access) market of North America, Motorola suffered from a mild drop in shipment volume in the third quarter. Samsung also turned in a lower-than-expected shipment performance, impacted by Nokia's rollouts of mid-range and high-end GSM (Global System for Mobile Communications)/GPRS (General Packet Radio Service) handsets, as well as LG's entry into the North American market.

Taiwanese mobile phone shipments failed to meet expectations and began to subside in the third quarter. As Motorola and Sony Ericsson took a high-end and mid-range approach, thus changing outsourcing arrangements, Taiwanese mobile phone shipment volume reached approximately 11.5 million units. Despite a year-on-year increase of 15%, this performance marks a nearly 10% decline sequentially. Taiwanese share of global supply also went down to below 8%. Taiwanese shipments once again registered slower growth than global shipments in the third quarter.

Due to decreased shipments, Taiwanese mobile phone shipment value totaled US$790 million in the third quarter, growing 10% year on year yet shrinking nearly 6% sequentially. However, as Taiwanese makers rearranged product mix, third-quarter ASP (Average Selling Price) edged up to US$69. Mid-range and high-end models comprised the bulk of orders, ranging from camera phones from Panasonic and NEC, to Smartphones from Sagem and Orange. As a result, shipment share of GPRS handsets and Smartphones increased to 34% and 5% respectively.

In the fourth quarter of 2004, seasonal effects in Western Europe and North America are expected to set a stable growth trajectory for global handset demand. After coming through model transitions in the value-line and mid-range segments, Taiwanese makers will continue to receive orders from vendors such as Motorola, Sony Ericsson, Panasonic, and NEC, while looking set to mass produce new handsets for Siemens, Sagem, and Philips. Additionally, Taiwanese branded shipments are anticipated to see strong growth as makers improve channel structure in China and accommodate Western European operators' promotions.

Driven by these positive factors, Taiwanese mobile phone shipment volume is expected to exceed 15 million units in the fourth quarter of 2004, climbing approximately 30% sequentially. Throughout 2004, the volume is expected to reach around 52.5 million units.