Abstract

Second-tier Makers to Strengthen Product Line-up

Besides the three manufacturers whose Smartphone businesses have been analyzed above, several other Taiwanese companies have also been moving into the Smartphone market. Of these, Compal Communications, Arima Communications, Chi Mei Communication Systems, and Qisda (BenQ) had all previously been engaged in feature phone manufacturing, whereas ASUS, Gigabyte Communications, Inventec, Mitac, and Eten have a shared background as IT hardware manufacturers. The Taiwanese Smartphone manufacturing industry also includes newly established firms such as Mobinnova and Jing Tai.

For some of these companies, Smartphones are only a sideline; others are only just getting off the ground. For the second-tier Smartphone manufacturers as a whole, the main objectives at present will be to expand their product line-ups, increase their profit margins, and to try to secure ODM contracts from leading branded vendors.

Makers' Strategies Vary with Their Background

Those Taiwanese Smartphone makers that had previous experience in feature phone ODM production -such as Compal Communications, Arima Communications, Chi Mei, and Qisda (BenQ) -have tended to focus on securing ODM contracts from branded vendors, rather than seeking to supply telecommunications operators directly.

Other companies, including ASUS, Gigabyte, Inventec, Eten, and Mitac, have chosen to focus on developing the distributor and telecommunications operator segments of the market. ASUS, Gigabyte Communications, Eten, and Mitac have all developed own-brand Smartphone products; Inventec's Smartphone business is limited to supplying unbranded handsets to channel players.

Most of the new entrants in the Smartphone manufacturing industry have a background in mobile phone design; they have therefore chosen a business model that involves supplying unbranded mobile phone directly to telecommunications operators. Both Mobinnova and Jing Tai have adopted this type of strategy, which they hope will enable them to avoid being dragged into vicious price competition with the existing ODM manufacturers. The goal of the new entrants is to achieve high profit margins rather than high volumes.

It can be seen from the above analysis that companies with different backgrounds seek to leverage their existing strengths when developing their Smartphone manufacturing business. Companies with a background in ODM production have continued to use the ODM model for Smartphone production; companies with a background in IT hardware manufacturing have sought to leverage their existing relationships with channel players.

Appendix

Research Scope

This report examines the Taiwanese Smartphone manufacturing industry, using analysis of business models, customer relationships, and product line-ups to explore the current state of the Taiwanese manufacturers' Smartphone businesses and the strategies that they have adopted.

Glossary of Terms

List of Companies