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Slower Replacement Cycle to Shrink Taiwan's Mobile Phone Market in 2009

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Note -- this news article is more than a year old.

Taiwan's mobile phone market is forecast to shrink by 9.3% to around 6.4 million units. The Taipei based Market Intelligence & Consulting Institute (MIC) puts the shrinkage down to slower handset replacements due to the economic downturn. Some 80% of the Taiwanese market depends on replacement sales.

Nevertheless, stimulated by the issuance of consumption coupons and vendors' promotion programs in the first quarter of 2009, it is projected that Taiwanese mobile phone market volume will reach about 1.71 million units in the first quarter of 2009, buoying up ASP to approximately NT$5,634 (US$165.85) and shipment value to NT$9.65 billion (USD284.07 million).

2009 is projected to be a crucial year for Taiwanese mobile operators in terms of strengthening their share in the mobile Internet market. As operators will not be able to provide much differentiated Internet access services with existing data cards, it is expected that they will seek to stimulate consumer demand by lowering service rates or enhancing transmission capacity. Furthermore, as mobile operators seek to diversify the types of devices able to access their networks, if the prices of related chipsets and terminal devices drop to a level acceptable for consumers, it is expected that mobile operators will also launch their own MID (Mobile Internet Devices) or e-book readers to tap different market segments.

Overall, as the global economy is projected to be locked in a downturn in 2009, consumer confidence is expected to be even weaker in the year ahead. As a result, it is expected that there will be keen price wars in mobile phone sales channels and that mobile operators will lower the Internet access rates for their data cards to stimulate demand.

As for the Taiwanese mobile phone market in 2008, with the exception of the first quarter which saw year-on-year growth in sales, the other three quarters all posted sales declines compared with the same periods in the previous year. Taiwanese mobile phone market volume in the fourth quarter of 2008 was 1.70 million units, down 5.9% sequentially and 4.7% year-on-year. Taiwanese mobile phone ASP (Average Selling Price) was on the decline as well, mainly owing to the fact that Taiwanese mobile phone users mostly chose to obtain free phones when renewing their subscriptions.

Meanwhile, the number of 3G subscribers saw steady growth in 2008. Boosted by mobile operators' subsidy policies for 3G phones and Smartphones, the sales of 3G phones accounted for 49.7% of the overall Taiwanese mobile phone market volume, while the sales of Smartphones inched up to over 5% of the overall market volume.

On the web: Market Intelligence & Consulting Institute

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