According to statistics of the ITIS project -a project initiated by Taiwan's Ministry of Economic Affairs and conducted by Taipei-based MIC -as Taiwanese makers mainly produce relatively low-priced entry-level phones, the impact of the current economic climate on the Taiwanese industry has been relatively limited. Meanwhile, as Sony Ericsson gradually increases its share of value-line phones, it has switched some production capacity from EMS (Electronics Manufacturing Services) companies to Taiwanese ODM (Original Design Manufacturing) companies. As a result, shipments of Arima and FIH/CMCS continued to increase, stimulating the Taiwanese industry's overall shipment. Shipment volume of the Taiwanese basic/feature phone industry is estimated at 20.72 million units in the third quarter of 2008, up 13.3% sequentially. The industry's shipment value in the third quarter is estimated at US$753 million, and ASP (Average Selling Price) rose to approximately US$36.
The GPRS/GSM (General Packet Radio Service / Global System for Mobile communications) share of the industry's overall shipment fell to about 86.9%, due to the increase in CDMA (Code Division Multiple Access) shipments. Actual GPRS/GSM shipment volume, however, increased 9.8% sequentially to 18.01 million units. Although the shipment growth of GPRS/GSM products was not as strong as CDMA models, shipment volume was stimulated and grew sequentially due to the fact that several mid-range and value-line GPRS/GSM models outsourced by Sony Ericsson were in mass production in the third quarter.
CDMA shipment volume grew 46.1% sequentially in the third quarter, reaching approximately 2.67 million units. CDMA products' share of overall shipment increased to 12.9%. Reasons for this growth include the steady shipment of CDMA phones for Nokia, and the fact that shipments of Taiwanese makers including Foxlink for CDMA terminals increased significantly, as Huawei won a China Telecom tender to supply CDMA network equipment for key cities such as Beijing, Guangzhou, and Xi'an.
Regarding WCDMA (Wideband CDMA) products, as some Taiwanese makers such as Qisda are gradually switching to the development of MID products and data network cards, WCDMA phone shipment volume and their share of total shipment continued to decline in the third quarter.
With the outlook for the global economy still unclear in the short-term future, major brands' outsourcing to Taiwanese makers was expected to become more conservative in the fourth quarter of 2008. However, Motorola, in a bid to make itself more attractive for investors with the goal of spinning off its mobile phone division before the third quarter of 2009, will try to increase its shipment volume in emerging markets in order to stabilize its worldwide market share. One of Motorola's key strategies for expanding market share has been its recent aggressive development of channel distribution in China and sales promotions. Therefore, it is expected that the Taiwanese industry's shipment will still maintain growth momentum in the fourth quarter as a result of Motorola and Sony Ericsson's strategies.
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About MIC
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
About ITIS
The ITIS (Industry and Technology Intelligence Services) project is managed by the Department of Industrial Technology of Taiwan's Ministry of Economic Affairs. As part of the project, research is conducted in a variety of fields, including the ICT sector. The project serves both the public and private sector.