July 6, 2006

According to the Taipei-based Market Intelligence Center of the Institute for Information Industry (III) in the first quarter of 2006 shipment volume of the Taiwan PDA industry reached 3,5 million units, up 18,5% year-on-year. Due to large pure PDA procurements by vendors in the fourth quarter of 2005 and the off-season effect, shipment volume slipped 11,9% sequentially in the first quarter of 2006. with shipment share of PDA phones climbing to 52,6% in the first quarter of 2006, the average selling prices rose to approximately US$ 259 in the fourth quarter of 2005. The Overall shipment volume amounted to US$1 billion in the first quarter of 2006, surging 47,5% year-on-yar but dowm 1,7% sequentially.

Due to the off-seam effect and the transition from old to new models, WCDMA ( Wideband Code Division Multiple Access ) amd CDMA ( Code Division Multiple Access ) 2000x1 EV-DO (Evolution Data Only ) PDA phones failed to record evident growth in shipment volume. In the first quarter, shipment volume of PDA Phones did not significantly change sequentially and remained at about 1,8 million units, which, though, jumped 77% year-on-year, due to increased orders from Palm and HP and growing demand from the North American and Western European markets due to the stimulation of push e-mail services. Meanwhile, due to the fact that GPS (Global Positioning System ) and demand is being overtaken by pure GPS demand and continuing decline in the shipment of pure PDAs, PDA phones accounted for about 52,6% of total PDA shipment in the first quarter, reaching mainstream status in the Taiwan PDA industry.

Shipment of PDA phone and GPS PDA is expected to be strong in the second quarter of 2006 and overall shipment volume is expected to hit 4.3 million units, up 22% sequentially. Many new models of WCDMA and CDMA2000 1xEV-DO PDA phones will enter mass production and shipment of new models HP, Palm, and Fujitsu-Siemens will continue, and therefore shipment volume of PDA phones is expected to grow 23% sequentially to 2.3 million units in the second quarter. Due to the busy tourism season in Western Europe and North America in thesecond quarter, shipment volume of GPS PDA is expected to growth 19% sequentially to 1.2 million units. Following a steep shipment plunge in the first quarter, pure PDA shipment volume is expected to rebound in the second quarter due to the end of inventory clearance by channel players. Pure PDA shipment volume is expected to hit 851,000 units in the second quarter, up 26% sequentially.

In the third quarter, due to increasing sales of various models of PDA phones and continuing decline in the shipment of pure PDA, total shipment volume of the Taiwan PDA industry is expected to hit 4,8 million units, up 12,9% sequentially, and the share of phone PDAs is expected to reach about 60%.