1 February 2008
Compal Communications expects handset shipments to grow 20-25% sequentially to 60 million units in 2008, according to company chairman Ray Chen.
Handset shipments fell sharply to 47.8 million in 2007 due to the decline in performance of Motorola, the major customer of the Taiwan company, according to market sources.
After an organizational reshuffle at its major customer, Compal's operation will gradually rebound in the second half of the year with average selling prices (ASPs) to increase between the second and the third quarters, Chen commented.
As orders are not coming as early as expected, Compal has not begun operations at its new plant in Ningbo, China. Chen noted that the company completed establishment of the plant last year, and official operations will kick off in the second half of 2008.
In response to questions relating to the possibility of setting up a plant in Vietnam, the chairman noted that Compal will not consider any such projects for at least two or three years.
Compal has formed a second business group to focus on 3G and GPS smartphones. The company will begin offering smartphones from the fourth quarter with an annual shipments target of less than one million units, Chen revealed, although shipments will jump in 2009. Compal will still make GPS-based products in the future and WCDMA and EVDO-based 3G phones, but it will focus on the smartphone market, Chen added.
Commenting on the recent heavy snows hitting China, Chen stated that shipments in January will not be affected as the company's Nanjing plant is not far away from the airport. However, Compal has strengthened its material inventory preparations in case of any potential damages. The bad weather may affect demand during the Lunar New Year in China, but this would be only a short-term impact, he added.
The chairman also noted that although the industry is pessimistic over the global economy, the company holds a different outlook, noting that some customers are even increasing orders or preparing shipments in advance due to the situation.
