Taiwan handset shipments to hit 28 crore by 2008

Taiwan's handset shipments are expected to hit 28.1 crore in 2008, or about 26 per cent of global shipments, according to ABI Research. The increase is reflective of the rising influence of the island's ODMs, especially in the low-end and mid-tier segments.

Motorola and Sony have made Taiwan a key component of their design and supply chain, said analyst Junmei He. "Taiwan's ODMs gain cost advantages through setting up plants in mainland China, and their leading role in supplying handset components is helping them further improve their cost structure and complete their supply chain," He said.

ODMs will account for 79 per cent of Taiwan's handset shipments by 2008, she said. Right now, Motorola and Sony Ericsson closely cooperate with Taiwan ODMs, while Nokia and Samsung have moved more cautiously to outsource. She also pointed out that Japan's firms like to access ODMs, but so far shipments are low.

The analyst also noted that Chinese handset vendors don't tap the Taiwanese ODMs that much, mostly because of unstable demand and thin profit margins. Chinese handset makers lost market share last year, she said, but have seen profit margins improve slightly compared to Q4 of 2005. "The handset market structure in mainland China has changed during the past two years. The changes include the erosion of market share by illegally distributed handsets, the reforming of distribution channels by vendors on the mainland, and the further involvement of operators in the sales and supply chains," He said.

In addition, He predicts the big vendors will increase market share and the proportion of operator-customised handsets will increase quickly, reaching 77 per cent of total handset shipments on the mainland in 2011.

- Mike Clendenin
EE Times