In the third quarter of 2004, amidst robust seasonal effects, prepaid subscriptions rose in Western Europe while demand for iDEN (Integrated Dispatch Enhanced Network) and CDMA (Code Division Multiple Access) mobile phones grew. Added that demand for new handsets strengthened in India, Brazil, and Russia, worldwide mobile phone shipments reached another quarterly peak, climbing 22% year-on-year to 180 million units.

Taiwanese makers ramped up mass production of value-line handsets for Motorola in the fourth quarter. Other vendors, such as LG, NEC, Panasonic, Philips, Siemens, and Sony Ericsson, also rolled out new models during the holiday season. Driven by these positive factors, Taiwanese handset shipment volume garnered record 15 million units in the fourth quarter of 2004, registering year-on-year growth of 7.2%. Taiwanese share of global supply hovered at 8.3%, a similar level seen in the third quarter, once again posting slower growth than global shipments in the fourth quarter.

Due to increased shipments, Taiwanese mobile phone shipment value totaled just over US$1 billion in the fourth quarter. Taiwanese makers continued to receive orders for new mid-range models from brand-name vendors while Taiwanese branded players continued to ship high-end models. Coupled with rising Smartphone orders from operators in Western Europe and North America, GPRS (General Packet Radio Service) and Smartphone shipment share advanced to nearly 40% and 6% respectively in the fourth quarter. However, mass production of value-line monochromatic handsets for Motorola made a dent in the four-quarter ASP (Average Selling Price), which dropped to US$68%.

Throughout 2004, global mobile phone market size expanded to 630 million units, riding on demand for new handsets in BRIC (Brazil, Russia, India, and China) nations as well as replacement demand in the US and Europe. The Taiwanese mobile phone industry registered a shipment volume of approximately 52 million units during 2004, up 21% from 2003 yet plummeting nearly 50% compared with 2002. The annual growth rate was for the first time lower than that seen in global shipments. Meanwhile, Taiwanese shipment value rose 17% from 2003 to US$3.6 billion, due to pronounced increases in share of camera phone, Smartphone, and branded shipments. While GPRS handsets became mainstream, Taiwanese makers gained more experience in mass production as well as in managing product cost. ASP thus shrank to US$70 in 2004.

In 2005, as growth in the global market slows, brand-name vendors are expected to shift focus toward development and production of high-end and mid-range models. Taiwanese makers will likely continue to concentrate on manufacturing mid-range and value-line handsets. Additionally, knock-down orders from Chinese customers are likely to suffer a further squeeze as they are now more involved in handset R&D and production, prompting Taiwanese makers to look to emerging markets such as Southeast Asia, Latin America, and India. During 2005, Taiwanese mobile phone shipment volume is anticipated to reach 63 million units on yearly growth of 22%. In the first quarter of 2005, seasonality in the US and Europe and inventory adjustments among brand-name vendors are expected to drive down Taiwanese shipments to 12.4 million units.

Market Intelligence Center, based in Taipei, Taiwan, was founded in 1987. MIC is Taiwan's premier IT industry research and consulting firm providing intelligence, in-depth analysis, and strategic consulting services on global IT product and technology trends, focusing on markets and industries in Asia-Pacific. MIC is part of the Institute for Information Industry. https://mic.iii.org.tw/english