Nikkei Electronics Asia -- February 2007
Industry & Market
Headset Makers Look to PDA Phones to Drive Growth

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Jan 26, 2007 18:35 Nikkei Electronics Asia
Faced with diminishing profit margins for their handset business, and an increasingly competitive field in which to develop converged devices that run on Windows Mobile, Taiwan handset ODMs have been developing PDA phones in order to profit from the next wave of growth. With increasing 3G adoption, Taiwan¡Çs manufacturers foresee that GPS, high megapixel cameras and push mail functions will become popular in 2007.

Taiwan¡Çs High Tech Computer Corp (HTC) is one of the largest manufacturers of smartphones and PDA phones running the Microsoft Mobile 5.0 platform. The platform leads in the smartphone market, with about 10 million units shipped in 2006 – of which about 40-45% are 3G handheld devices.

However, the company¡Çs decision to focus on its branding business and its acquisition of Dopod International have driven away some of its largest ODM customers, such as iMate plc and O2, as well as large carriers whose brands compete directly with HTC and Dopod in markets in Europe, Asia, and the Middle East. But HTC¡Çs loss of these customers has created new opportunities for other Taiwan handset ODMs.

Microsoft¡Çs Involvement
Support from Microsoft has been another factor in pushing Taiwan¡Çs ODMs to develop smartphones and PDA phones. ¡ÈFor high-end PDA phones, software and hardware integration is difficult, and Microsoft has been very supportive of manufacturers designing handsets that run on the Windows Mobile 5.0 operating system,¡É said Christopher Chen, general manager of sales and marketing at Gigabyte Communications Inc.

Gigabyte recently shipped its g-Smart i120 PDA phone which features an analog TV tuner, allowing users to watch as well as record TV programs on their handsets. Gigabyte said that its built-in TV tuner is popular in developing markets such as Russia and Thailand where users prefer functions other than push mail or Internet browsers.

Another newcomer to the PDA phone market is Arima Communications, one of Taiwan¡Çs largest handset ODMs. The company is targeting shipment of the Xda Flame for O2 in the first quarter of 2007. The Xda Flame is equipped with an Intel XScale PXA 270 processor, with a built-in Nvidia GoForce 5500 discrete graphics chip, and a 3.6-inch display and Wi-Fi and Bluetooth connectivity, as well as other common features. ¡ÈA device with high-end graphics helps us to stand out,¡É said Arima spokesman Stephen Hung.

Meanwhile, PDA phones with built-in GPS function remain a high-end option. E-ten Information System Co was one of the first ODMs to embed a GPS chip into a PDA phone. E-ten¡Çs ¡Èglofiish¡É M700 has a full sliding QWERTY keyboard with EL backlight. Along with an embedded SiRF Star III chip for GPS navigation, the device also comes with a Wi-Fi chip for Internet access.

by Van Tran