05.04.2001
Compal signs contract with Motorola on GPRS handsets

• Compal Electronics (2324 'Ren Bao') subsidiary Hua Bao (unlisted) has announced it has signed a contract with Motorola to manufacture GPRS handsets. We understand that Motorola already has GPRS technology know-how, hence we see the contract as a 'win-win' cost-sharing agreement.

• GPRS handset volume on the deal may be as much as 5m units with shipment starting from October this year. Hua Bao reported handset shipment of 78k units in 1Q01 and expects this figure to surge to around 400k in 2Q01. The company forecasts total handset shipment in 2001 will be around 3m units (down from earlier expectations of 5m units), of which 1m will be produced by Compal and 2m by Hua Bao.

• We see the target of 3m units (including GSM and GPRS) as somewhat high and not easily achievable in a handset market which is labouring under recessionary trends in the global economy.

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