TAIPEI, TAIWAN: According to Market Intelligence Center (MIC), an ICT industry research institute based in Taipei, global mobile phone shipment volume reached approximately 285 million units during Q4-2006, boosting the full-year volume to 980 million units, up 23 percent from the previous year.

Despite negative effects of the BenQ-Siemens breakup at the end of September 2006 and worse-than-expected performance of second-tier branded makers on fierce competition from major international brands, Taiwanese contract makers benefited from year-end peak demand, enabling Taiwanese mobile phone shipment volume to reach 28.3 million units during Q4-06, inching up 0.2 percent sequentially.

 Although the decline in shipment  of branded makers was offset by the shipment increase of contract makers, fourth-quarter shipment growth of the Taiwanese mobile phone industry is still a far cry from the 16 percent growth rate of the global industry.

However, owing to the off-season effect and the fact that contract makers will not start mass production of new mainstream models until Q2-07, Taiwanese mobile phone shipment volume is likely to drop 14 percent sequentially to 24.2 million units during Q1-07. Q2-07 shipment volume is forecasted to reach 30 million units, thanks to mass production of new models for Motorola and Sony Ericsson.

Overall, the Taiwanese mobile phone industry is likely to perform strongly in the latter part of 2007 following a weak start, with sales in the first half still relying on existing models. Growth momentum will begin to gather steam at the end of the second quarter. Taiwanese mobile phone shipment volume is forecasted to reach approximately 120 million units in 2007, maintaining the level of 2006 or suffering a slight decline.

As far as product mix is concerned, the Taiwanese mobile phone industry will gradually rid itself of the over-reliance on mid-range and value-line models. Shipment share of mid-range and high-end feature phones will pick up conspicuously. Particularly, models featuring color screen, VGA or even megapixel digital camera modules, and FM radio will increase. Shipment of 3G models is also expected to pick up significantly, boosting the overall shipment value and ASP.

Faced with the intensified industry concentration, second-tier contract makers and branded mobile phone makers lacking economies of scale successively carried out corporate restructuring at the end of 2006 or modified the development direction for their mobile phone business. Following the announcement by its major clients Panasonic and NEC that they would retreat from overseas markets, Quanta, for instance, will gradually switch its contract manufacturing business to the niche market of higher-end PDA (Personal Digital Assistant) phones.

The global industry was stimulated by the peak season and persisting demand in the emerging Chinese and Indian markets. Due to increased outsourced orders from major international brands and BenQ's acquisition of Siemens' mobile phone unit, Taiwanese mobile phone shipment volume scored 56 percent year-on-year growth and reached 122 million units in 2006, raising its global share to 12.4 percent, up from 9.8 percent in 2005.

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