Limited in chances to increase their branded handset sales, Taiwan-based handset vendors are now turning into OEM makers or waiting for an opportunity to consolidate operations, market sources pointed out.

Orienting themselves on the successful business model of High Tech Computer (HTC) that manufactures Windows Mobile-based smartphones and PDA phones, other local companies, such as Gigabyte Communications, Kinpo Electronics, E-Ten Information Systems and Mitac International, started marketing their own-brand handsets. However, being reportedly facing difficult conditions in the market, the companies have found the business also hindered by factors, such as technical barriers in 3G product developments and increased competition from Taiwan and China companies, the sources explained.

Kinpo, which launched its first iDo-branded PDA handset, the S600, in the third quarter of 2005, has recently decided to focus on the OEM handset business, consolidating its OEM/ODM handset operations with Cal-Comp Electronics (Thailand), according to the sources.

Under the consolidation plan, Kinpo’s handset unit will be included in Cal-Comp, with the latter focused on developing and manufacturing OEM handsets and Kinpo concentrated on marketing, the sources added. Both Kinpo and Cal-Comp are affiliated companies of the Compal Group.

Gigabyte Communications, which mostly shipped its handsets under the gSmart brand, switched to the OEM business after securing orders for PDA phones from O2 Asia Pacific in the second quarter of this year, according to the sources.

Some employees in the Gigabyte handset team recently moved to another own-brand handset vendor Inventec Appliances, the sources said.

Source- http://www.digitimes.com