- Taiwanese mobile phone shipments are expected to see an 86.3% year-on-year increase to total 15.8 million units in the second half of 2002, according to Market Intelligence Center (MIC), a Taiwan-based IT intelligence and consulting firm. Growth will primarily be driven by shipments in the fourth quarter, when more handset makers will be winning international vendor certification and overcoming the low yield rates intrinsic to the bottom of the learning curve.  

A large portion of these increased shipments will be GPRS models, which will amount to approximately 35% of Taiwanese mobile phone shipment volume, accounting for almost a quarter of global GPRS shipments. By the end of 2002, total Taiwanese handset shipment volume will amount to 6.8% of worldwide shipments, and is expected to jump to over 20% by 2006. 

The growing amount of GPRS production similarly boosted shipment volume in the second quarter of 2002. Accounting for 12.7% of shipments, compared to 0.2% in the first quarter, GPRS output helped total volume reach a record high of 6.8 million units, a year-on-year increase of 138.9%.   

"In addition to a larger number of GPRS shipments, this growth is a major symptom of the increasing maturation of GSM handsets," said Feng Lin, Industry Analyst with MIC. "Faced with future 3G design and time to market considerations, leading brand-name vendors are increasingly turning design and production over to Taiwanese manufacturers" 

The record high volume was accompanied by a new high in shipment value, totaling US$446.4 million in the second quarter of 2002. While this 126% increase was also a product of more GPRS shipments, consecutive growth failed to keep up with that of shipment volume. "The prices on certain models sold by brand name vendors have seen even sharper decreases. Combined with the strong buying power of brand name vendors that are involved in large-scale outsourcing of value-line handsets to Taiwanese makers, shipment value has lagged behind volume," explained Lin. 

Additionally, a growing number of CKD (Completely Knocked Down) and SKD (Semi-Knocked Down) handsets are being shipped to China as more international vendors set up assembly plants there. In some cases, CKD and SKD handsets have been shipped to EMS providers before reaching brand-name vendors. 

"As leading international vendors consider product line diversifications, time to market, and cost-driven models, Taiwanese mobile phone manufacturers still possess certain advantages. However, as EMS providers set up plants in China and establish long-term relationships with international vendors, they will pose a threat to Taiwanese handset makers," said Lin. 

Korean makers have also been aggressively supplying Chinese makers with CKD and SKD handsets, and have taken away some business from Taiwanese manufacturers. "With popular industrial designs incubated through years of trial in their domestic market, Korean makers have managed gain the attention of Chinese consumers," explained Lin. "In order to not be outmaneuvered by Korean makers, the first half of 2002 saw the production of Taiwanese handsets with similar industrial designs to mobile phones launched by Korean makers." 

For a more detailed analysis, please refer to "The Taiwanese Mobile Phone Industry , 1H 2002 and Beyond," or visit MIC's web site at https://mic.iii.org.tw.