Japan-based vendors, including Sony Ericsson, Fujitsu Toshiba, NEC, Sharp and Panasonic, have become a main source of ODM orders for handsets, mainly 3G smartphones, for Taiwan-based makers, according to these makers.

Taiwan-based Compal Communications, Arima Communications, Quanta Computer, Qisda and Inventec Appliances used to undertake OEM production or assembly of feature phones for Japan-based vendors, the sources indicated. As Japan-base vendors failed to tap overseas markets in the past several years, orders from them to Taiwan decreased drastically, the sources noted.

However, Japan-based vendors have rallied their operational resources to tap overseas markets of handsets again and sought ODM or JDM (joint design manufacturing) production of 3G smartphones mainly with Taiwan-based makers, the sources pointed out. For example, Arima and Quanta have obtained orders from NEC and Fujitsu Toshiba respectively, while Sharp and Panasonic have talked with Taiwan-based makers for production of Android smartphones, the sources indicated.

While orders are usually in quite small volumes, Japan-based vendors are good partners, looking for products with quality design, hardware/software platform and component and require quite high product quality with their orders have relatively high gross margins, the sources indicated.

Taiwan-based makers are generally conservative about Japan-based vendors' performance in tapping overseas markets because they, except Sony Ericsson, lack experience of cooperation with mobile telecom carriers in the US and Europe, the sources pointed out. Instead, Japan-based vendors will have many opportunities in the Asia market, including China and Southeast Asia, based on their advantages of good product design and brand reputation, the sources indicated.

Source:digitimes