According to Market Intelligence Center (MIC), the scale of the Taiwanese mobile phone market reached 1.87 million units in the first quarter of 2006. Due to brisk demand during the Chinese Lunar New Year holiday period, Taiwanese mobile phone operators provided intra- and inter-network call services at a uniform price in the first quarter of 2006. International brands rolled out new 2G/2.5G models featuring varied design and colors, and also expanded their 3G product lines, successfully attracting many young consumers. Although the majority of 3G handsets in the market are high-end models featuring a high resolution camera module and multimedia functions, the high-subsidy strategy of telecoms and channel players boosted the market share of 3G phones to 7% in the first quarter and pushed mobile phone ASP (Average Selling Price) to NT$6,340. Market value of the Taiwanese mobile phone market increased 10% year-on-year, to approximately NT$12 billion in this quarter.

Looking ahead to the second quarter of 2006, with consumer spending expected to remain at a relatively low level, sales of mid-range and high-end mobile phones in Taiwan still have to rely on high subsidies and promotional programs offered by telecoms to spark replacement demand in the market. It is expected that in the second quarter of 2006, volume of the Taiwanese mobile phone market will reach approximately 1.83 million units, up 15.3% year-on-year but down 2.1% sequentially.