Premier Image Technology, the leading digital camera OEM maker in Taiwan, claimed that unhealthy price competition among makers led to a drop in its gross margins in the fourth quarter of 2005, according to company president Cliff Liu. However, the company is still confident about its business outlook for 2006 and it aims to grow its revenues 40% this year.
Premier stated its margins fell by over one percentage point in the fourth quarter to 13%, down from 14.1% in the third quarter. Liu commented that a 10% drop in the average selling price (ASP) of projectors affected Premier’s margins.
Premier also reported that its annual revenues were up 53% last year, at NT$35.9 billion, and the company had earning per share (EPS) of NT$2.71, up 48% from 2004.
Premier projects that its 2006 revenues will grow more than 40% from last year. The company has already landed strong orders in the first quarter and the company expects that the first half of this year will only account for 30% of its total revenues for the year.
In order to grow its margins and profits, Premier aims to boost its in-house optical lens production ratio to 60%. In addition, the company will adjust its product mix to keep the ratio of below-one megapixel digital cameras to below 10% of overall shipments.
The company stated it aims to grab 17% of the digital camera market this year.
In the handset camera module market, Premier expects its shipment ratio of above-one megapixel units to account for 70-80% of shipments, with shipments increasing four-fold on year.
VGA handset camera modules accounted for over 40% of the company’s camera module shipment in 2005.
Article translated by Esther Lam and edited by Esther Lam
