According to MIC (Market Intelligence Center), an ICT industry research institute based in Taipei, shipment volume of the Taiwanese mobile phone industry is expected to grow 28.6% and 15.4% sequentially in the third and fourth quarter of 2007, with shipment volume forecasted to reach 24.5 and 28.3 million units respectively. Full-year shipment volume in 2007 is forecasted to reach 93 million units. Although the Taiwanese industry in the first half of the year was affected by Motorola's performance, outsourcing orders by vendors such as Sony Ericsson provided a push to the industry. In the second half of 2007, growth momentum in the Taiwanese mobile phone industry is expected to come from shipment volume growth of vendors such as Sony Ericsson and LG, and mass production of new handset models.

Worldwide mobile phone shipment volume in the second quarter of 2007 is estimated at 260 million units, up from 254 million in the first quarter of the year. Taiwanese mobile phone shipment volume reached 19.1 million units in the second quarter, down 11.1% sequentially and 41.7% year-on-year. According to MIC industry analyst Sagitta Pan, the Taiwanese industry relied too much on one single customer in the first half of the year, which affected Taiwanese shipment as Motorola suffered large declines in shipment volume.

Due to its continued losses and weak sales of new handset models, Motorola's strategy was to increase the share of the mid-range W series in order to improve its product mix. However, this strategy did not produce the expected results. Meanwhile, Motorola still regards its ultra value-line models as the key to maintain its market share in emerging markets. Coupled with the weak sales of new handset models, the ASP (Average Selling Price) of Taiwanese shipments declined in the second quarter. Shipment share of products priced below US$50 increased to 76% in the second quarter, while shares of products priced between US$125-200 and products priced above US$200 declined.

Due to the declines in shipment volume and ASP, Taiwanese mobile shipment value in the second quarter of 2007 fell 22% to US$755 million. As handset vendors continue to rely on the Taiwanese industry for the production of value-line models, and as shipment of value-line private-label handsets is increasing, shipment value is expected to continue falling in the third quarter of 2007.

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