According to MIC (Market Intelligence Center), an ICT industry research institute based in Taipei, the scale of the Taiwanese mobile phone market is expected to reach 7.1 million units for the full-year 2007, down 2% in comparison with 2006. Sales volume in the second quarter of 2007 is expected to reach 1.7 million units. Due to the continuing demand of the NCC (National Communications Commission) for mobile operators to cut their 2G voice call rates, mobile operators will face challenges in bolstering their revenues. Therefore, in 2007 they will focus their effort on accelerating popularity of WCDMA (Wideband Code Division Multiple Access) and HSDPA (High Speed Downlink Packet Access) services, creating the conditions for expanded use of mobile Internet access, as well as increasing sales of value-added services other than SMS (Short Message Service) and ringback tones.

In the first quarter of 2007, the scale of the Taiwanese mobile phone market reached 1.8 million units, up 5.2% sequentially, but down 3.4% year-on-year. The market benefited from promotions launched by international brands and mobile operators during the Chinese Lunar New Year holiday.

Due to the increasing market share of WCDMA models and brisk sales of models tagged over NT$10,000 (US$300.3; US$1=NT$33.3) via open sales channels, Taiwanese mobile phone market value advanced 7.6% sequentially to NT$11.1 billion (US$333.3 million) in the first quarter. ASP (Average Selling Price) rose to NT$6,116 (US$183.7).

GSM (Global System for Mobile Communications) / GPRS (General Packet Radio Service) phones were still mainstream products. With more and more mid-range and value-line WCDMA models bundled with subscription contracts, prices of these WCDMA phones have gradually approached those of GSM/GPRS models, enabling consumers to make use of WCDMA services without extra costs. As a result, market share of WCDMA models reached 22% in the first quarter of 2007. CDMA (Code Division Multiple Access) phones had a relatively weak sales performance in the first quarter.

Market share of mobile phones with a built-in camera module reached approximately 70% in the first quarter. Although models tagged under NT$5,000 (US$150.2) remained mainstream products, mobile operators have begun pushing sales of models tagged over NT$5,000, especially several specific WCDMA models, in line with their increased emphasis on applications such as mobile Internet access and value-added services. As a result, market share of models tagged under NT$5,000 dropped by one percentage point, while share of models tagged between NT$5,001 and NT$10,000 increased. Models priced between NT$10,001 and NT$15,000 (US$450.5) were not covered by the promotional packages of mobile operators during the Chinese Lunar New Year, and therefore share of models in this price range was somewhat affected. However, thanks to good market reception of several high-end mobile phones of Nokia and Sony Ericsson in open channels, market share of models tagged over NT$15,001 inched up one percentage point.

Among local Taiwanese brands, only BenQ-Siemens launched several new models, while other brands, such as Asus, Dopod, and OKWAP, had few new models hitting the market. This enabled international brands to further boost their shares in the Taiwanese mobile phone market, with the combined share of the leading five international brands rising to 79.7%, from the previous quarter's 74.5%.

Of the five leading international brands, Sony Ericsson scored the highest growth in market share, followed by Samsung and Nokia. Sony Ericsson's value-line WCDMA, CyberShot, and Walkman phones sold well. Samsung made good gains in the CDMA segment, while Nokia enjoyed good sales of music phones and N series models.

Motorola and LG, though, failed to further boost their market shares, as their new models could not continue the strong sales of the Razr and Chocolate models. Combined market share of Taiwanese brands reached 8%, with BenQ-Siemens heading the pack.

More information can be found in the following MIC reports: The Taiwanese Mobile Phone Market, 2Q 2007

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