Taiwan handset makers to benefit from competition as top-tier vendors vie for third-place ranking

Taiwan handset makers are expected to benefit from the competition for the third rank among three of top-five first-tier handset vendors – Motorola, LG Electronics and Sony Ericsson, according to sources in Taiwan's handset industry.

In the first quarter of 2008, LG outperformed Sony Ericsson to become the world's fourth largest handset vendor. In view of the marginal global market share lead Motorola held over LG in the first quarter, LG may have a chance to replace Motorola as the third largest vendor in the second quarter, the sources argued.

LG is now cooperating with Taiwan-based Compal Communications, Arima Communications and Chi Mei Communication Systems (CMCS) for the production of the mid- to entry-level handsets, with the company's total orders to Taiwan makers in 2008 likely to double from the amount recorded in 2007, estimated the sources.

However, Sony Ericsson may stage a comeback in the second quarter, buoyed by the planned launch of new flagship models during the quarter, the sources pointed out. Meanwhile, Sony Ericsson is also increasing its outsourcing of mid-range and entry-level models to Taiwan makers, the sources added.

Although Motorola reduced its orders to Compal Communications and CMCS due to its declining market share, the US vendor has teamed up with Qisda which is expected to begin shipping 3G handsets to Motorola in the third quarter, said the sources, noting that Motorola is also seeking partners for the production of smartphones.

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