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Research Reports

The Taiwanese Mobile Phone Industry, 1H 2004 and Beyond

August 16, 2004 / Feng Lin

48 Page, Statistics Report

US$2,700 (Single User License)

Abstract

Taiwanese makers continued to produce value-line GSM/GPRS handsets for Motorola, Sony Ericsson, and Panasonic in the second quarter, while facing challenges in their own branded businesses and in emerging markets abroad. Second quarter volume reached 12.7 million units, accounting for 8.6% of global supply. ASP took a steep tumble to due short-term shifts in product mix and business types. Shipment performance in the second half of 2004 is expected to remain on par with first quarter scale owing to brand-name vendors' reallocation of outsourcing awards as well as new model transitions.

List of Topics
Quarterly forecast of Taiwanese shipment volume up to 2Q 2005. Special discussions on future impact of vertical integration on competition. 1QH2004 review of volume, volume by assembly level, value, ASP, and product architecture including product mix, product mix by tier, displays, camera modules and handset shapes. Taiwanese mobile phone market share of baseband, power amplifier, and transceiver suppliers. Manufacturer rankings and profiles, customer portfolios, industry concentration analysis, production locations, shipment destinations, and business types.

ADI, Agere, Alcatel, Ares, Arima, ASmobile, ASUS, AT&T Wireless, Bahow, BenQ, Broadcom, Capitel, CECT, Chartkar, CMCS, Commit, Compal-C, Compal-E, CuteMobile, DARTS, Dbtel, Fin Win, Flextronics, Foxconn, Ginewave, GVC, Haier, Hitachi, HTC, Hutchison, IAC, Infineon, Inventec Alliance, Konka, LG, Lite-On, Mediatek, Microsoft, Mio Technology, Mitac, mmO2, Mobicom, Motorola, NEC, Ningbo Bird, Nokia, NTT DoCoMo, O2, Orange, PalmOne, Panasonic, Panda, Philips, Qian Wei, Qualcomm, Quanta, Renesas, RFMD, Sagem, Samsung, Shenzhen SED, Siemens, Silicon Labs, Skyworks, Solomon Wireless, Sony Ericsson, Soutec, Systex, Techfaith, TI, T-Mobile, UTStarcom, Vacom, Vodafone, Wistron

List of Figures
Figure 1 The Worldwide and Taiwanese Mobile Phone Industry's Shipment Volume, 1Q 2002 - 2Q 2004

Figure 2 The Worldwide and Taiwanese Mobile Phone Industry's Shipment Volume, 1Q 2002 - 2Q 2004

Figure 3 The Taiwanese Mobile Phone Industry's Shipment Value and ASP, 1Q 2002 - 1Q 2004

Figure 4 The Taiwanese Mobile Phone Industry's Product Mix, 1Q 2002 - 2Q 2004

Figure 5 The Taiwanese Mobile Phone Industry's Product Mix by Shipment Share, 1Q 2002 - 2Q 2004

Figure 6 The Taiwanese Mobile Phone Industry's Smartphone Shipment Share by Operating System, 1Q 2002 - 2Q 2004

Figure 7 The Taiwanese Mobile Phone Industry's Shipment Share by Display Type, 1Q 2002 - 2Q 2004

Figure 8 The Taiwanese Mobile Phone Industry's Shipment Share by Display Color Count, 1Q 2003 - 1Q 2004

Figure 9 The Taiwanese Mobile Phone Industry's Embedded Camera Share, 1Q 2003 - 2Q 2004

Figure 10 The Taiwanese Mobile Phone Industry's Embedded Camera Share by Array Format, 3Q 2003 - 2Q 2004

Figure 11 The Taiwanese Mobile Phone Industry's Shipment Share by Handset Shape, 1Q 2002 - 2Q 2004

Figure 12 Mobile Phone Baseband Solution Providers' Taiwanese Market Share, 1Q 2002 - 1Q 2004

Figure 13 Mobile Phone Transceiver Solution Providers' Taiwanese Market Share, 1Q 2002 -2Q 2004

Figure 14 Mobile Phone Power Amplifier Suppliers' Taiwanese Market Share, 1Q 2002 - 2Q 2004

Figure 15 The Taiwanese Mobile Phone Industry's Shipment Volume by Production Location, 1Q 2002 - 2Q 2004

Figure 16 The Taiwanese Mobile Phone Industry's Shipment Share by Production Location, 1Q 2002 - 2Q 2004

Figure 17 The Taiwanese Mobile Phone Industry's Shipment Volume by Assembly Level, 1Q 2002 - 2Q 2004

Figure 18 The Taiwanese Mobile Phone Industry's Shipment Share by Assembly Level, 1Q 2002 - 2Q 2004

Figure 19 The Taiwanese Mobile Phone Industry's Shipment Volume by Business Type, 1Q 2002 - 2Q 2004

Figure 20 The Taiwanese Mobile Phone Industry's Shipment Share by Business Type, 1Q 2002 - 2Q 2004

Figure 21 The Taiwanese Mobile Phone Industry's Shipment Volume by Customer Region of Origin, 1Q 2002 - 2Q 2004

Figure 22 The Taiwanese Mobile Phone Industry's Shipment Share by Customer Region of Origin, 1Q 2002 - 2Q 2004

Figure 23 The Taiwanese Mobile Phone Industry's Shipment Share by Customer, 1Q 2002 - 2Q 2004

Figure 24 The Taiwanese Mobile Phone Industry's Share of Motorola Shipments and Profit Performance Comparison, 1Q 2002 - 2Q 2004

Figure 25 The Taiwanese Mobile Phone Industry's Share of Sony Ericsson Shipments and Profit Performance Comparison, 1Q 2002 - 2Q 2004

Figure 26 The Taiwanese Mobile Phone Industry's Share of Siemens Shipments and Profit Performance Comparison, 1Q 2002 - 2Q 2004

Figure 27 The Taiwanese Mobile Phone Industry's Share of Alcatel Shipments 1Q 2002 - 2Q 2004

Figure 28 The Taiwanese Mobile Phone Industry's Share of Panasonic Shipments, 1Q 2002 - 2Q 2004

Figure 29 The Taiwanese Mobile Phone Industry's Share of LG Shipments and Profit Performance Comparison, 1Q 2002 - 2Q 2004

Figure 30 The Taiwanese Mobile Phone Industry's Shipment Destinations, 1Q 2002 - 2Q 2004

Figure 31 Taiwanese Mobile Phone Manufacturers' Shipment Volume by Tier, 1Q 2002 - 2Q 2004

Figure 32 Taiwanese Mobile Phone Manufacturers' Shipment Volume Share by Tier, 1Q 2002 - 2Q 2004

Figure 33 The Taiwanese Mobile Phone Industry's First Tier Product Mix, 1Q 2002 -2Q 2004

Figure 34 The Taiwanese Mobile Phone Industry's First Tier Product Mix Share, 1Q 2002 - 2Q 2004

Figure 35 The Taiwanese Mobile Phone Industry's Second Tier Product Mix, 1Q 2002 - 2Q 2004

Figure 36 The Taiwanese Mobile Phone Industry's Second Tier Product Mix Share, 1Q 2002 - 2Q 2004

Figure 37 The Taiwanese Mobile Phone Industry's Shipment Volume, 1Q 2002 - 2Q 2005

List of Tables
Table 1 Taiwanese Mobile Phone Manufacturers' Rankings by Tier, 2Q 2002 - 2Q 2004

The second half of 2004 will see further polarization of the mobile phone industry. Although Vodafone, Orange, and AT&T Wireless are beginning to roll out WCDMA services in the second half, WCDMA handsets have yet to take on uniform specifications and functionality. Under these circumstances, Japanese and Korean makers are able to build a solid supply system in domestic markets, leveraging their better control over key components and relationship with local operators. Such vertical integration is expected to enable Japanese and Korean makers to outpace the US and European vendors in WCDMA development, reversing the competitive dimension in 2G/2.5G development.

As GSM/GPRS handsets are increasingly moving toward open OS and standardized specifications, in the form of integrated chipsets and modules, future competitiveness will lie in time to market and response to consumer demand. Brand-name vendors' drive for lower cost and quicker time to market is likely to accelerate vertical integration in the mobile phone industry. How fast product specifications and air interfaces mature will also determine brand-name players' outsourcing strategy.

Appendix

Definitions

Business Types

OEM

The OEM (Original Equipment Manufacturing) business model entails carrying out product manufacturing or assembly according to specifications supplied by the customer. The OEM business model emphasizes production efficiency; thus, in order to lower costs, customers outsource manufacturing to OEM providers. This cooperation forms a division of labor among design, manufacturing, and sales.

ODM

The ODM (Original Design Manufacturing) business model entails undertaking product design and manufacturing, but not direct retail sales or brand promotion. ODM providers either collaborate with customers on product specifications or independently design products according to customer specifications; the ODM provider then receives manufacturing orders upon customer approval. The ODM model links the sales capabilities of the ODM customer and the design and manufacturing capabilities of the ODM provider, developing a cooperative division of labor throughout the product's value chain.

Form Factor

Full System

Handsets that contain all components mounted on PCB (Printed Circuit Board) as well as complete assembly of peripheral components. Ready for immediate use after shipment to the customer.

SKD (Semi-Knock-Down)

PCB-mounted components and several other major components, such as battery and cover, are shipped disassembled to customer. The customer performs simple final assembly.

CKD (Complete-Knock-Down)

Components are shipped to customer. Customer performs surface mount and final assembly.

Glossary of Terms

ASP		Average Selling price
BRIC		Brazil, Russia, India, and China
CDMA		Code Division Multiple Access
CIF		Common Intermediate Format
CKD		Complete-Knock-Down
EDGE		Enhanced Data rates for Global Evolution
EMS		Electronics Manufacturing Service
GPRS		General Packet Radio Service
GSM		Global System for Mobile Communications
MP		Mega Pixel
ODM		Original Design Manufacturing
OEM		Original Equipment Manufacturing
OS		Operating System
PAS		Personal Assess System
PCB		Printed Circuit Board
PCBA		PCB Assembly
RF		Radio Frequency
SARS		Severe Acute Respiratory Syndrome
SKD		Semi-Knock-Down
SMT		Service Mount Technology
TD-SCDMA		Time Division Synchronous Code Division Multiple Access
TDMA		Time Division Multiple Access
UMTS		Universal Mobile Telecommunications Service
VGA		Video Graphics Array
WCDMA		Wideband Code Division Multiple Access

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