Taiwan's cellphone exports plummet more than 70% in 11 month period - Focus Taiwan

Taiwan's cellphone exports plummet more than 70% in 11 month period

Taipei, Dec. 22 (CNA) In the first 11 months of this year Taiwan's cellphone exports fell more than 70 percent from the previous year, amid escalating competition in the global market, according to the Ministry of Finance (MOF).

Data compiled by the ministry showed exports of Taiwan-made cellphones -- smartphones and feature phones -- totaled US$400 million in the 11 month period, down 71.9 percent from a year earlier. The MOF said the decline was the steepest ever seen by the domestic cellphone industry.

The ministry noted that Taiwan's cellphone exports hit a peak of US$10.6 billion in 2011.

The MOF data also showed that led by strong cellphone exports, Taiwan's export of internet/communication devices hit a high of US$16.9 billion in 2011, accounting for 5.4 percent of the country's total exports that year, the data indicated.

However, Taiwan cellphone brands have seen increasing competition, in particular from Chinese brands, while suppliers in South Korea are gearing up to expand production and put more pressure on Chinese brands, market analysts said.

In addition, the global smartphone market has been saturated, a negative development that caps demand and impacts Taiwan's cellphone exports, analysts said.

As a result, on the back of falling cellphone sales and a relatively high comparison base over the same period of last year, Taiwan's export of internet/communication devices for the first 11 months of this year fell 15 percent from a year earlier to US$11.7 billion, which accounted for 3.8 percent of Taiwan's total exports, the MOF said.

Analysts said the local cellphone industry initially benefited from the rising popularity of models rolled out by Taiwanese brands such as HTC Corp., while PC vendors including Asustek Computer Inc. and Acer Inc. made an effort to penetrate the global smartphone market.

HTC benefited from rising global sales and posted NT$73.32 (US$2.38) in earnings per share in 2011, the highest in the company's history. That profitability also pushed up HTC shares to NT$1,300 in late April 2011. However, amid rising competition in both high-end and low cost smartphone segments, the company has seen its bottom line come under pressure in recent years.

HTC posted a loss per share of NT$3.18 in the third quarter of this year, following a NT$2.53 loss per share in the previous quarter.

Despite suffering a net loss in the third quarter, HTC still posted NT$20.01 in earnings per share for the first nine months of the year because of a one-off profit it made in the first quarter after selling its smartphone ODM assets to Google for US$1 billion.

On Saturday, HTC shares closed down 0.83 percent at NT$36.00 on the Taiwan Stock Exchange, down more than 97 percent from their peak in 2011.

(By Chiu Po-sheng and Frances Huang)

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