According to research of the Taipei-based Market Intelligence & Consulting Institute (MIC) conducted as part of the ITIS project, Taiwanese feature phone shipment volume in the second quarter of 2009 reached 11.7 million units, representing 14.6% sequential growth. The industry's shipment value arrived at US$490 million in the second quarter of 2009, up 7.7% sequentially. ASP (Average Selling Price) of Taiwanese feature phones declined in the second quarter to US$42, down from US$45 in the first quarter. This decline was mainly due to the fact that models shipped for Motorola, Sony Ericsson, LG, and Nokia were mainly value-line and older models in the second quarter. As shipment volume of new 3G models has yet to offset 2G models, ASP declined in the second quarter.
Looking ahead to the second half of 2009, Taiwanese feature phone makers are expected to face challenges in expanding shipment scale and securing more contract orders. According to MIC Industry Analyst Joyce Chen, "this is due to the fact that Motorola has shifted focus to mid-range and high-end Smartphones, Sony Ericsson has turned aggressively towards the development of mobile services and high-end products, and Nokia has taken a cautious stance towards shipment." At the same time, as LG, which aims to expand its presence in emerging markets, is expected to increase orders outsourced to Taiwanese makers, and Sharp has changed its business strategies in 2009 to turn aggressively towards the development of overseas markets and to outsource production, Taiwanese makers are expected to have a chance of winning contract orders. "Consequently, it is expected that Taiwanese makers' feature phone shipment volume will see gradual sequential growth in the second half of 2009. However, the industry's shipment volume is still expected to decline 35.9% compared to the full-year 2008", said Ms. Chen.
In the fourth quarter of 2008 and the first quarter of 2009, brand-name vendors were more cautious towards the economic outlook and kept inventory levels lower than normal. In the second quarter of 2009, as brands were more optimistic about the global outlook in the third quarter and thus increased outsourcing orders, Taiwanese feature phone shipment saw significant growth but still suffered a 36.0% year-on-year decline. The industry's ODM (Original Design Manufacturing) companies have long relied on single clients and they are thus prone to uncertainties in order placement. When clients face operating difficulties or have enough capacity themselves, they are likely to cut orders outsourced to Taiwanese makers, affecting these makers' shipment volume as a result. Therefore, the industry's makers could strengthen their capabilities in the development of new and multiple platforms and expand their client base (for instance, telecom operators) to offset the disadvantages of having just one major client.
More information can be found in the following MIC report: The Taiwanese Feature Phone Industry, 3Q 2009
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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.