Taiwan market: HTC launches HTC Shift UMPC

Daniel Shen, Taipei; Steve Shen, DIGITIMES [Wednesday 30 January 2008]

High Tech Computer (HTC) on January 29 officially launched its HTC Shift UMPC (ultra mobile PC) in Taiwan, with the device to be available in the local market, as well as in Australia, Hong Kong, Malaysia, Singapore and Thailand, at the end of February.

HTC will initially promote the HTC Shift in Taiwan in cooperation with Far EasTone Telecommunications (FET) and the 3C channel operator Tsann Kuen Enterprise. However, the company does not rule out the possibility of cooperating with other telecom carriers in Taiwan to push sales of the mobile computing device, according to sources at HTC.

Chunghwa Telecom (CHT), a long-time partner of HTC, has decided to test the water for the UMPC or MID (mobile Internet device) segment by teaming up with Asustek Computer to push sales of Asustek’s Eee PC, according to a Chinese-language Commercial Times report.

The HTC Shift will be available at NT$39,900 (US$1,235) in a package deal from FET, with the suggested retail price likely to go up to NT$45,990 in the channels, the paper indicated.

HTC plans to launch a 5-inch mobile computing device designed to replace the HTC Advantage in 2008, said company sources at HTC.

Taiwan market: LG Electronics to double handset sales in Taiwan in 2008

Daniel Shen, Taipei; Steve Shen, DIGITIMES [Thursday 31 January 2008]

LG Electronics aims to double its sales of handsets in Taiwan to 700,000 units in 2008, with handset revenues reaching US$100 million, accounting for a 10% share in the local market in terms of sales value, according to Finsen Chen, vice president of telecom business unit at LGE Taiwan.

In 2007, LG sold 350,000 handsets in Taiwan worth US$49 million, accounting for a 5% share in terms of unit sales and a 5-6% share in terms of sales value, Chen stated.

In line with increasing sales of handsets in Taiwan, LGE expects handset revenues to account for 30% of its total revenues in Taiwan in 2008, up from slightly over 20% in 2007, Chen said.

A total of 30-35 new handsets are to be launched in Taiwan in 2008, with 10-15 models supporting 3G standard and 20 models supporting 2G and CDMA standards, indicated Chen, noting that the company also plans to introduce Android-based handsets into the market by the end of this year.

Asustek president reveals forecast for 2008

Yen Ting Chen and Monica Chen, Taipei; Joseph Tsai, DIGITIMES [Wednesday 30 January 2008]

Asustek Computer’s Eee PC achieved good performance in Japan having sold around 10,000 units during its first week of sale. The company expects the low-cost PC market in the second and third quarters of 2008 to fill up with new competitors, according to Jerry Shen, president of Asustek.

Shen revealed that Acer will be the competitor able to pose the largest threat to the Eee PC due to the company’s advantages in economic scale and experience in competitive pricing, market planning and manufacturing support. Hewlett-Packard (HP) will also be a noteworthy challenger, Shen added. Although Micro-Star International (MSI) and Gigabyte Technology will likely be able to carve out a small niche in the market, the keys to winning in the low-cost PC segment are strong research and development and expertise in chassis production, according to Shen. As a result Asustek does not consider the two a significant threat at this time.

The three major challenges for Asustek and the Eee PC in the future are to solve the issue of small panel size, increase battery life and shorten battery recharge time, Shen revealed. However, when questioned about whether changes to the design and specification will lead to increases in cost, thereby eliminating the Eee PC’s main advantage, Shen noted that the Eee PC line up will expand to include elite level products, but stressed that each generation’s mainstream price will not see much of a difference.

In other news, Asustek announced own-brand graphics card shipments in 2007 of 6.8 million units and OEM shipments of 5.6 million. The company expects own-brand graphics cards will reach 7.7 million units in 2008, while motherboard shipments will reach 24 million units.

Own-brand and OEM notebook shipments in 2007 reached 4.3 million and 2.7 million units, respectively. In 2008, the company is aiming to increase shipments to seven million units own-brand and ten million OEM.

Other than motherboards, Asustek’s handsets will be the next product line to be outsourced to outside makers, while Eee PC outsourcing is currently under planning. Asustek’s own-brand notebook production will remain at Pegatron Technology and Unihan Technology in 2008, noted Shen.

Regarding China’s new labor laws, Shen said the company estimates its costs to increase around 10%, while after-tax profits will drop around 5%.

Finally, Shen also pointed out that the heavy snows in China may have a possible impact on February’s notebook shipments.

A monster 4Q for Nokia, says iSuppli

Press release, January 30; Eric Mah, DIGITIMES [Wednesday 30 January 2008]

Nokia has emerged as the Godzilla of the global mobile-handset business, devastating the competition and dining on their market share on its way to dominance, according to research firm iSuppli. In the fourth quarter of 2007, Nokia’s global mobile-handset shipments amounted to 133.5 million units, up 19.5% from 111.7 million in the third quarter of the year, giving the Finnish wireless behemoth a 39.5% share of the market.

Number one ranked Nokia achieved the highest rate of sequential growth among the Top-5 mobile-handset suppliers in the fourth quarter of 2007, even beating the impressive 18.9% rise by number four supplier Sony Ericsson, noted iSuppli. Nokia’s unit shipments rose by 21.8 million sequentially in the fourth quarter, 1.6 times the combined increase of 14.1 million units for the other Top-5 mobile-handset brands. With a 19.5% sequential increase in unit shipments in the fourth quarter, Nokia outgrew the global mobile-handset market’s rise of 15.4% by 4.2 percentage points, when accounting for rounding, noted iSuppli, adding that Nokia’s 39.5% market share in the fourth quarter almost equaled the 41.9% combined shares of the four other Top-5 mobile-phone makers.

For the full year of 2007, Nokia shipped 437.1 million mobile phones and attained a commanding 38% market share. This was nearly three times the 14% share of Nokia’s closest competitor for the year: Samsung Electronics of South Korea. The Finnish company outperformed the mobile-handset industry in 2007 with 26.5% annual growth, compared to 16.5% for the entire industry.

To explain Nokia’s success, Teng cited the company’s sales leadership in most global regions and its dominant position in shipments of mobile handsets using 3G W-CDMA technology.

American exceptionalism

While Nokia appears to be invincible, the mobile-phone Goliath still faces some challenges.

“Nokia has acknowledged its relatively weak position in CDMA technology and the fact it doesn’t dominate the North American market,” Teng said. “However, the company is planning on introducing new appealing models for the US market and is engaging in a more active marketing campaign in North America in 2008, which was kicked off by the ubiquitous product placement in the movie Cloverfield.”

Battle of the gargantuan companies

Much of Nokia’s gains came at the expense of its two closest competitors: Samsung and Motorola.

Number two Samsung achieved sequential fourth-quarter growth of only 8.7%, falling short of the industry’s 15.4% growth rate. The company’s market share declined to 13.7% in the fourth quarter of 2007, down from 15.1% in the third. However, Samsung’s unit shipments in the fourth quarter rose by a whopping 45.1% from 31.9 million in the fourth quarter of 2006, the highest rate among the Top-5 players.

For the entire year of 2007, Samsung sold 161.1 million mobile phones and attained a market share of 14%, up from 11.9% in 2006. Samsung in 2007 benefited from its strong sales in Europe, where nearly 40% of its mobile-handset shipments went in the fourth quarter.

Motorola’s muddle

Number three Motorola continued to suffer declining market share in the fourth quarter-despite a nearly double-digit percentage sequential increase in shipments.

The US-based firm shipped 40.9 million mobile handsets in the fourth quarter of 2007, up 9.9% from 37.2 million in the third quarter. However, the company’s shipments were down 37.7% compared to 65.7 million in the fourth quarter of 2006.

Motorola’s market share declined to 12.1% in the fourth quarter, down from 12.7% in the third quarter, and a major drop from 22.6% in the fourth quarter of 2006.

For all of 2007, Motorola shipped 159 million mobile handsets, giving it a 13.8% share of global shipments. This is down 26.8% from 217.4 million shipments in 2006 and about an 8% percentage point drop from its market share of 22% in 2006.

Motorola throughout 2007 struggled with slowing demand for its existing mobile handsets, delays in new product introductions, declining market share and falling profitability.

However, Motorola appears to be taking steps toward a turnaround. The company already has begun executing on its plan to revive its mobile-handset business by improving profitability and shipment volume.

“While Motorola’s recovery has proceeded at a slower-than-expected rate, iSuppli believes that Motorola is putting the right pieces into place to pull off a rebound,” Teng said.

The return of Sony Ericsson

Sony Ericsson in the fourth quarter of 2007 shipped 30.8 million units, up 18.9% from 25.9 million in the third quarter, making it the only Top-5 mobile-phone maker besides Nokia to exceed the industry average growth rate. The company is leveraging its strong brand equity in the Walkman and Cybershot lines to bolster its growth.

Beyond its unit shipment gains, Sony Ericsson is benefiting from the fact that it has the highest average selling prices (ASPs) in the mobile-handset industry among the Top-5 players.

LG’s troubles

LG Electronics of South Korea posted the lowest sequential growth of all the Top-5 mobile-handset makers in the fourth quarter, with an 8.2% increase, despite its year-over-year rise of 40.2%. The company’s market share slid to 7%, down from 7.7% in the third quarter.

Worldwide mobile-phone market share ranking, 2007 and 4Q07 (ranking by thousands of unit shipments)
4Q07 rank	2007 rank	Company	2007 shipments	2007 market share	4Q07 shipments	4Q07 market share	4Q07 sequential quarterly growth	4Q07 annual quarterly growth	3Q07 shipments
1	1	Nokia	437,100	38.0%	133,500	39.5%	19.5%	26.5%	111,700
2	2	Samsung	161,100	14.0%	46,300	13.7%	8.7%	45.1%	42,600
3	3	Motorola	159,000	13.8%	40,900	12.1%	9.9%	(37.7%)	37,200
4	4	Sony Ericsson	103,400	9.0%	30,800	9.1%	18.9%	18.5%	25,900
5	5	LG Electronics	80,500	7.0%	23,700	7.0%	8.2%	40.2%	21,900
		Others	208,900	18.2%	62,800	18.6%	16.9%	42.4%	53,700
		Total	1,150,000	100.0%	338,000	100.0%	15.4%	16.5%	293,000

Source: iSuppli, compiled by Digitimes, January 2008

Taiwan market: CHT in talks with Samsung for cooperation during Beijing Olympics

Kaddy Chung, Taipei; Steve Shen, DIGITIMES [Wednesday 30 January 2008]

Chunghwa Telecom (CHT) is in talks with Samsung Electronics to cooperate on video streaming and other marketing projects during the 2008 Beijing Olympics, according to sources at CHT.

CHT may introduce the P318+ handset which Samsung designed exclusively for the Olympic Games into the Taiwan market, according to a Chinese- Language Commercial Times report.

In addition, CHT also plans to launch more customized own-brand handsets supporting video streaming to better serve to its clients, said the sources, noting that the company has held talks with a number of Taiwan suppliers, including Asustek Computer, BenQ, Inventec Appliances and Gigabyte Communications, over handset production.

CHT expects sales of customized own-brand handsets, including dual-band models, to reach 250,000 units in 2008, the sources indicated.

HTC forecasts revenues up 20-30% in 2008; new products to launch in 2Q

Daniel Shen, Taipei; Steve Shen, DIGITIMES [Thursday 31 January 2008]

High Tech Computer (HTC) expects its revenues will grow 20-30% on year in 2008, with plans to launch a series of new products starting in the second quarter, company CFO Huei-ming Cheng said on January 30 during an online investors conference.

The new products will differentiate from the current Touch-series lineup, focusing on models supporting the 3G standard initially and then followed by EDGE-compliant models for emerging markets, Cheng indicated.

In addition, revenues will continue to grow at a robust annual rate of 35% in the first quarter of this year, although the first-quarter figures are likely to slide 15-20% from the fourth quarter of 2007, Cheng added.

For the fourth quarter of 2007, revenues were up 34.7% on year to NT$39 billion (US$1.21 billion), with non-ODM business growing over 60% on year, Cheng noted.

HTC’s total shipments of mobile devices were up 3.7% on year to 9.92 million units in 2007, falling slightly short of its target of 10 million units. However, the ASP (average selling price) climbed 7.9% on year to NT$11,300 last year, according to company data.

In other news, the company’s new plant in Pudong, Shanghai is scheduled for completion in September-October 2008, with the plant’s production capacity to ramp up gradually to one million units a month, Cheng revealed.

National Roaming Fee to Cut in China

(Business News & Technology News, 29 Jan 2008)

Two relevant telecom regulators, National Development and Reform Commission (NDRC) and Ministry of Information Industry (MII), recently held a public consultation on reduction of national roaming fee. The new price cap for roaming possibly will come out before Chinese New Year. It is one further step of Chinese tariff reforms, following gradual cancellation on receiving party pay mechanism, regulating mobile price packages. In comparison with current roaming charges, roaming fees will fall by 13.3 percent and 80 percent under the two draft plans, according to the official statistics. “We see over 500 million customers will benefit from the tariff reduction, in particular current inflation rate hits decade-high and thousands of end users will travel between provinces over Chinese New Year holiday,” says Charice Wang, Research Analyst at Ovum, based in London. Nevertheless, as the only country to charge end-users travelling inter-provinces for using mobile in one network, the most debate is unexposed cost of roaming at one network between provinces. As most information of operators has not been disclosed to public, customers hope a further cut than the second plan and operators prefer the first proposal with less cut. The new tariff shall strengthen fixed-to-mobile substitution (FMS) in China. In December 2007, China Netcom and China Telecom, two major fixed-line operators, reported their landline subscribers continue to fall by 2.53 million and 1.48 million respectively. Whereas, there is a rapidly increasing popularity of mobile services and China Mobile announced to gain 6.6 million new customers in the same period. The lost balance between mobile and fixed operators will be enlarged when end users prefer to use mobile as a result of lower roaming charge. Therefore, the lower roaming fee might lead to the telecom sector restructuring, when the governments consider the state-own fixed operators’ revenue and long-term development speed up. “The year of 2008 is not a quiet year for China telecom sector,” says Wang.

Vibo aims to double 3G revenues in 2008, Fitel seeking more capital from abroad

Kaddy Chung, Taipei; Adam Hwang, DIGITIMES [Monday 28 January 2008]

Vibo Telecom, one of the five operators of 3G mobile communication services in Taiwan, expects the revenues from its 3G services to increase to NT$5.9 billion (US$182 million) in 2008, double that of the NT$2.94 billion posted in 2007, according to the company while personal handy-phone system (PHS) operator First International Telecom (Fitel) seeks more investment from abroad.

In line with its revenue goal, Vibo expects its number of its 3G subscribers to increase by 600,000 in 2008 and accordingly will expand the number of its 3G base stations from about 4,000 currently to 5,050 at the end of 2008 and procure 500,000-600,000 3G handsets, the company pointed out. Vibo currently has more than 600,000 3G subscribers.

Fitel, the only operator of PHS mobile communication services in Taiwan and a WiMAX licensee for the northern region of Taiwan, is seeking foreign shareholders to invest a total of US$60 million, according to the company. A few potential overseas investors are performing due diligence checks and are expected to make their decisions as early as March, the company pointed out.

Arima Communications handset shipments to peak at 5-6 million units in 3Q08

Daniel Shen, Taipei; Steve Shen, DIGITIMES [Monday 28 January 2008]

Arima Communications is expected to ship two million handsets in the first quarter of this year, with the shipments growing to 2.5-3 million units in the second quarter before peaking at 5-6 million units during the July-September period, according to sources at Taiwan-based handset component makers.

Handset shipments for all of 2008 are expected to total 14-16 million units, up from 9.5 million units shipped in 2007, the sources estimated.

Arima will begin shipping the T270 and T280 to Sony Ericsson in the first quarter, followed by the R300 Radio in the second quarter, while phasing out production of Sony Ericsson’s T250, K200 and K220 during the first half, the sources noted.

Arima will also manufacture four new handsets for LG Electronics this year with total shipments expected to reach two million units, indicated the sources, noting that all of the four models, including the KP320 slated for shipment in the first quarter, will be built using handset solutions from MediaTek.

Arima’s other handset clients also include Sharp of Japan and imobile of Thailand, said the sources.

Sony Ericsson’s R300 Radio handset
Photo: Company

Taiwan makers to ship 7.47 million smartphones in 1Q08, says paper

EDN, January 28; Steve Shen, DIGITIMES [Monday 28 January 2008]

Shipments of smartphones from Taiwan-based handset makers are expected to grow 13.8% sequentially to 7.47 million units in the first quarter of this year and continue to expand at a sequential rate of 5.6% to 7.89 million units in the second quarter, the Chinese-Language Economic Daily News (EDN) quoted Taiwan’s Market Intelligence Center (MIC) as saying.

MIC expects High Tech Computer (HTC), Inventec Appliances and Asustek Computer will all post strong on-quarter growth in smartphone shipments in the first half, said the EDN. The paper also indicated that UBS Securities, while acknowledging that HTC has decided to delay the launch of new products originally slated for the first quarter of this year, currently still maintains a “buy” rating for HTC stock of HTC with a target price of NT$802 (US$25) per share.