BOSTON-Contract manufacturers will make 26 percent of all handsets worldwide, a number that will likely grow to 38 percent in 2007 as first and second-tier handset vendors seek lower costs, production flexibility and economies of scale, according to a new report from Strategy Analytics.
In the firm’s Wireless Device Strategies report, “Contract Manufacturers’ Path to 40 Percent Cellular Production Share,” Strategy Analytics predicts contract manufacturers could fuel the growth of third-tier reference design handset vendors.
“Handset manufacturing is splitting into two camps-those who believe in-house production allows manufacturers to maximize control and minimize risk, such as Nokia and Samsung, and those who believe outsourced production allows manufacturers to exploit economies of scale and output flexibility, such as Sony Ericsson and Alcatel,” said David Kerr, vice president of Strategy Analytics.
According to the report, Flextronics will be the world’s largest contract handset manufacturer in 2002, with an estimated 42 percent share in 2002, while HTC of Taiwan will be the world’s leading contract personal digital assistant manufacturer with an estimated 16-percent share.
