World’s Mobile Phone Production Expands 6.5 % – Short of 400 Million...

World’s Mobile Phone Production Expands 6.5 % – Short of 400 Million Units

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The world’s cell phone production started to gain speed somewhat, though it still lacks power.

The 2002 output is likely to drop below the 400-million line for two years in a row. The annual production is not expected to recover to the 400-million-unit level until 2003, at the earliest.

According to a survey by the Nikkei Market Access, full-year production in 2002 will be 386.4 million units, up only 6.5 percent compared with the figure in 2001.

On a quarterly basis, production continued to fall short of the previous same term since the first quarter of 2001, but turned to growth in the second quarter of 2002, when the output of 94.71-million-units recorded a 12-percent increase from the same term in 2001.

However, the pace of recovery is moderate. Production on a quarterly basis is not likely to pass the 100-million-unit mark in the third quarter of 2002, and will probably be carried over to the fourth quarter.

35 Pct. Will Be Color Cell Phones by 2003

The introduction of color mobile phones in Europe and the United States is drawing much attention from the market as a demand-creating factor in the future.

When in June 2002, the world’s top cell-phone manufacturer, Nokia Corp., announced business prospects for the latter half of 2002, the company also disclosed plans to introduce color cell phones. It was interpreted as a show of the company’s enthusiasm for color units.

As was represented by Nokia, European and U.S. cell phone makers plan to step up their efforts in turning out color cell phones in 2002 and 2003.

LCD makers are receiving an increasing number of orders for color LC panels, and Nikkei Market Access estimates that the production of color LC panels for mobile phones will be nearly 150 million pieces in 2003.

The ratio of color units in the total production of mobile phones rose in 2002 by 7 percentage points from last year to 20 percent, and is expected to gain another 15 points in 2003 to 35 percent.

However, the introduction of color cell phones is not likely to lead to any drastic increase in the amount of cell phone output as a whole.

In the European market, which is expected to be the largest market for color units, demand will consist mostly of replacements for black and white types, and will not lead to cultivation of new demand or quicken the replacement cycle.

Therefore, although the production of color units will increase in 2003, the output of monochrome units will decrease, and no rapid growth in production as a whole is in sight.

As compared with previous year, the production increase in 2002 is likely to remain at a single-digit figure of 8.5 percent, or about 419.4 million units. This figure is about 10 million less than in 2000, when a record number of cell phones were produced.

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