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Low-price smartphones to benefit Taiwan makers: research institute

Increasing popularity of low-price smartphones is expected to benefit Taiwan manufacturers, which have a cost advantage, said market research firm Topology Research Institute yesterday.

Hsieh Yu-shan, researcher with Topology, predicted that next year global handset shipments would hit 1.86 billion, a rise of 4.49 percent from this year. Of that total, 860 million will be smartphones, a rise of 27.47 percent from this year and translating into a penetration rate of 46.2 percent.

Next year, Asia will replace North America as the biggest smartphone market, said Hsieh, who attributed the Asian market's rapid growth to increasing popularity of smart devices in China, where population is huge, people's incomes are on the increase, and 3G coverage has become more extensive.

According to Hsieh, demands for phones with more features and lower prices, coupled with subsidies offered by major mobile operators, will lift smartphone shipments in China to 256 million next year, a rise of 36.2 percent.

Hsieh also said that next year China will see increasing sales of under US$100 smartphones, which will help popularize smart devices on the other side of the strait and will initiate a cycle where people replace their 2G phones with 3G ones.

This trend is set to benefit Taiwan's smartphone original equipment manufacturers, which have developed a strong capability in cost-control, she said.

Separately, Topology also pointed out long-term evolution (LTE) will become the dominant 4G technology, after Apple included LTE in the iPhone 5.

According to Topology, next year will see the rollout of several LTE-based smart phones, some of which may even be mid-priced models.

At this stage, LTE only supports data communications, while voice communications are made possible by the HSPA or EV-DO technology. As such most LTE phones will include two modules, one for 4G and one for 3G, Topology said.

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