02.06.2001
Delay of GPRS system

• With many handset manufacturers anticipating slow 1H01 sales, their hopes for a good year rest on improving conditions during 2H01. However, we remain cautious about the prospects for improvement given the global economy slowdown, as well as expected delays in the switch to the faster and cheaper GPRS system.

• Acer Peripherals Inc. (2352 'Ming Ji) and GVC Corp. (2322 'Zhi Fu') remain confident about sales of new GPRS handsets in 2H01. Acer Peripherals expects sales to rise on the back of similar prices between the new GPRS handsets, and existing GSM handsets. GVC hopes people will move to GPRS handsets quickly, despite some problems in the Internet service provided by the new GPRS system.

• We expect the rate of migration to GPRS handsets from GSM to be slower than expected, and feel it unlikely that people will rush to upgrade handsets until GPRS is ready. Consequently, we believe that most handset manufacturers will miss their targets for the year if the mass upgrading to the GPRS system is delayed.

BennyLo@Primasia.com +886-[0]2-2547-8869