According to research of the Taipei-based Market Intelligence & Consulting Institute (MIC) conducted as part of the ITIS project, boosted by shipments for the three major brands Apple, Palm and HTC, it is projected that the overall Taiwanese Smartphone industry shipment volume will continue to rise in the second half of 2009, riding on the growth momentum that began to emerge at the end of the second quarter. It is expected that the shipment of the Apple iPhone 3G series will see further growth, as so far the iPhone 3GS has been well-received by the market and as there is a new low-price bundle deal for the 8GB iPhone 3G. At present, shipments of Palm Pre have been plagued by upstream component shortages. However, as these problems are expected to be solved and a WCDMA model is projected to hit the European market via collaboration with Telefonica in the fourth quarter of 2009, it is forecasted that shipment volume of the Palm Pre series will see further expansion as well. As for HTC, with the shipment of major models such as Hero starting in the third quarter, it is expected that shipment volume of HTC products will see significant growth in the second half of the year. Shipment volume of the Taiwanese Smartphone industry is forecast to reach approximately 12.1 million units in the third quarter of 2009.

According to MIC Industry Analyst Edward Lin, "HTC's leading advantages in the Android platform arena have begun to meet challenges from other vendors. Samsung has launched its first Android-based Galaxy i7500 in Europe in July, and other vendors are expected to tap into the market soon. It is expected that Smartphone vendors will no longer be able to maintain the high-price strategy for Android-based products in the future." Furthermore, in terms of hardware specifications, it is expected that there will not be new stimulus for price growth in the near future. "AM-OLED display panels, for example, will not be available for large-scale application for another one or two years due to low yield rate at present. Therefore, the current rise of Taiwanese Smartphone industry ASP (Average Selling Price) is expected to be merely a short-term phenomenon", said Mr. Lin.

Having braved the economic downturn in the first quarter of 2009, major international branded vendors and telecom operators revised their mobile phone demand outlook from ultra-conservative to moderately cautious. Therefore, various vendors began replenishing inventories starting in June and increased shipments supplied by Taiwanese manufacturers. Moreover, boosted by advanced shipments anticipating the June launch of the Apple iPhone 3GS and Palm Pre as well as mass shipments of HTC's second-generation Android-platform Magic and the Touch Diamond2 and Pro2, Taiwanese Smartphone manufacturers saw considerable shipment volume growth in the second quarter of 2009. Taiwanese Smartphone industry shipment volume in the second quarter of 2009 reached approximately 9.34 million units, growing 38.9% sequentially and 30.5% year-on-year.

Thanks to the increase of ASP (Average Selling Price) to US$307 in the second quarter of 2009, Taiwanese shipment value grew to approximately US$2.87 billion in this quarter, representing a sequential growth rate of 41.4% and year-on-year growth rate of 34.7%. The growth in ASP and shipment value can be ascribed to the mass shipments of the Apple iPhone 3G series and Palm Pre. Meanwhile, HTC's second-generation Android-platform Magic comes in a relatively high price tag compared to the previous G1 model, the pricing strategy for which was controlled by Google. In addition, Touch Diamond2 and Pro2 are both high-end models, therefore further stimulating the second-quarter ASP of Taiwanese Smartphone shipments.

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About MIC

Market Intelligence & Consulting Institute (MIC), 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 Industry and Technology Intelligence Services (ITIS) 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.