Mobile Handset Framework & Case Industry Report, 2006

Handsets & Devices:

Mobile Handset Framework & Case Industry Report, 2006

ResearchInChina
Management Report March 2007

Table of Contents

Handset case is a field with high technical threshold. At present, China only has a few handset case manufacturers whose products could meet the middle standards although it is world's largest production base of plastic products. Globally, only about 11 to 15 suppliers could embark upon the production of handset cases in accordance with middle standards.

Experienced years of development, the market of plastic handset case is in maturity and the competition becomes fiercer and fiercer. Nearly all plastic handset case suppliers suffer from a sharp drop in the operating profit margin. In 2003, most suppliers could keep an operating profit margin of 20-25% or so, but the figure decreased to 10% or even less in 2006. Probably, it is difficult for those suppliers in year of 2007. After years of probe in the market and being led by the trend of Motorola's super-thin handsets, metal case rapidly seized the market of high-end handsets. Since the high threshold of metal case, it will be hard for handset manufacturers that are specialized in plastic cases to enter this field. Currently, the world's major handset metal case manufacturers cluster in China's Taiwan, including Chi Cheng, CATCHER, Foxconn, Waffer and ICHIA, etc., and 90% of metal handset cases are produced in Taiwan. Besides, the Korean supplier HV-VATEC should also not be neglected.

There are two trends for the development of handset cases in the future. The metalized case has become the mainstream in middle-standard handsets of plastic handsets; the other is the increasing proportion of metal handset cases, particularly in high-end handsets. Metal case enjoys many advantages over plastic case. To begin with, metal handset case can be made lighter and thinner, and its intensity is superior to that of plastic ones. Thinness and lightness means a lot for handsets in the market nowadays. Secondly, metal case is characterized by excellent thermal conduction. Presently, the ever increasing power consumption of handsets, particularly the ones adopting 0.18-um technique, will lead to the heat threat to handset users in talk time. Next, metal case is merited by electro-magnetic interference, far superior to plastic case and with less harm to users' health. Lastly, metal case is environment-friendly and can be recycled, while it will take decades for plastic case to break up and does a lot harm to the environment. However, metal handset case has disadvantages such as long development period, high cost of materials, excessive manufacturing procedures and low good yield, etc. This shows that metal case is suitable for high-end handsets and smart phones with large shipment.

In 2003, the handsets adopting plastic cases enjoyed a proportion of 99%, while metal case (aluminum alloy) only 1%. The proportion of aluminum alloy case can be up to 8% in 2006 and 10% in 2007. In quantity, the figure will increase from 110 million pieces in 2006 to 157 million pieces in 2007, up by 43% year-on-year.

There is a trend of Mg-alloy case to substitute for plastic materials. Motorola will increase the proportion of adopting Mg-alloy framework to be 50%. In addition, there will be also a growth of 15% to 20% for Nokia in 2006, and about 20% for Samsung. The proportion for the mobile framework adopting Mg-alloy was 90% in 2005, 17% in 2006, and 25% in 2007. The annual shipment in 2005 got to 72.9 million pieces, up by 53%, and the shipment in 2006 increased to 102.8 million pieces with a growth rate of 141%. In 2007, the shipment will rise to 285 million pieces. As far as the plastic case is concerned, the market is shrinking, and the shipment will decreased from 805 million pieces in 2006 to 700 million pieces in 2007.

Number of pages - 145

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