July 30, 2001

Among grievances of the international IT business, dominating local press reports, the PDA sector seems to beam with optimism, as these handheld mobile computers, in a departure from previous basic functions like data storage, retrieval and organizing, are now also featuring connection the the Internet, accessing e-mail, playing music and watching videos, with some also serving as voice recorders, taking digital photographs and run word processing and spreadsheets.

According to Taiwan's Institute for Information Industry (III), the PDA market in Taiwan last year reached sales of 780.000 units, with the III predicting that this year's sales could grow th over 2 million. The PDA market has already shown tremendous growth in 2000, and with PDAs becoming smaller, faster, more convenient, technologically advanced and potentially cheaper, it seems that this growth is likely to continue in 2001 and beyond.

The global PDA market is expected to amount to between 15 million and 20 million units this year, up ffrom 10 million in 2000. Industry insiders in Taiwan believe that the international heavyweights in the line will increase their outsourcing from Taiwan this year in order to cut production costs, citing reports that all of the world's top five PDA brands - - Palm, Sony, TRG, IBM and Handspring - - have approached Taiwan's leading IT manufacturers including Acer, Inventec, Mitac and First International Computer. The government is determined to foster the development of the PDA industry in Taiwan, and has reportedly brought local manufacturers together to form an alliance aimed at developing related products. Already, the alliance has negotiated agreements for the licensing of the Palm and WinCE operating systems for use in their PDAs. A total of 87 manufacturers in Tiwan have decided to go with the Linux system, while 44 have sided wi9th the WinCE platform, 37 with PalmOS, and 21 with EPOC. The @VIS Platform developed by Taiwan's Institute for Information Industry is used by 18 local companies. Acer has won the right to use PalmOS in its own brand PDAs, but is also developing WinCE-compatible and Linux-based models for the outsourcing market.
Mitac introduced a WinCE and two Linux models this year, and First International also debuted a Linux-based model at the Computex show. The Linux system is popular among local manufacturers who are put off by t he expensive royalties charged by Windows and Palm for their operating systems. The relatively inexpensive Penbex OS from Penbex Data Systems is also favored by some manufacturers.

While the Palm operating system now controls more that 7% of the worldwide PDA market, WinCE is expected to be the close second with 3% to 4% of the market soon, thanks to its adoption by prominent makers as Compaq and HP. Compaq is reported to have arranged with HTC Corp., a subsidiary of Taiwan's VIA Technologies Inc. for the manufacture of its iPAQ PDAs. HTC expects this order to result in deliveries of two million pieces this year, up almost 400% from 2000.