Via the ODM business model, Arima Communications has established a firm foothold in the worldwide market for feature phones, said company presient Owen Chen in a recent interview with Digitimes. Chen revealed that currently, three out of the global top-five handset vendors are among Arima's major clients. And looking forward, Arima expects to achieve similar success in the smartphone sector.
Q: We've learned that Arima's total handset shipments in 2010 supassed those shipped by rival company Compal Communiations. Last year you became the largest Taiwan-based ODM handset maker, but you also barely reached breakeven. Can you talk about the company's business prospects for this year?
A: Arima had a tough time in 2009, when the industry was adversely affected in the aftermath of the global financial crisis. We had an unprofitable first half of 2010, but then were able to return to profitability in the second half of the year.
Our shipments toward the end of 2010 appeared strong. In the former half of the year, Arima's monthly shipments averaged 800,000-900,000 units. Shipments began to rise later last year, reaching as high as over two million units. Overall we shipped more than 16 million mobile phones in 2010, up more than 40%. The full-year shipment figure also represented a record high for the company.
Arima is aiming to ship more than 23 million handsets this year, which would show more than 40% growth compared to 2010 levels. Revenues for 2011 are also set to grow simultaneously.
Q: Can you reveal a bit about Arima's order status for 2011?
A: Orders placed by our Europe- and US-based clients are expected to rise and contribute impressively to our sales performance this year. However, those by our Asian customers are likely to drop mainly due to some of those companies' organization adjustment.
Q: Earlier this year, you remarked that the company would shift its focus to smartphones. Can you provide more updates?
A: Our shipments of 3G handsets and smartphones are slated to kick off in the second half of this year. We'll be working with both Qualcomm and MediaTek in 3G solutions, and focus on the Android platform.
Actually several years ago, Arima started its smartphone business. But the early entry did not bring profits to the company due to the market's immaturity. And also because the success of our feature phone business, we decided to suspend smartphone operations for strategic reasons.
However, the popularity of smartphones nowadays has encouraged us to return to the segment. With our previous deployment and experience, Arima was able to restart the smartphone business in the shortest time possible to meet customer needs.
Q: Do you think tablet PC is the other area Arima may step into?
A: I would say instead of havinging an eye on tablet PCs, Arima is more eager to develop its capability to make "touchpad mobile phones." Apparent difference between the two is that tablets usually come with 9-inch and larger displays, while touchpad handset devices feature panels of seven inches and below. The latter also specifically highlights mobility and connectivity via 3G, Wi-Fi, Bluetooth and GPS technologies and of course, has calling functions.
Q: Developing new products requires sufficient R&D resources. How would you prepare for that?
A: We will expand our R&D team modestly, and are looking for talents overseas such as engineers from Korea and Japan. Those with expertise in the design of human-machine interfaces and software will be on top of our headhunting list.
We are also interested in seeking partners and cooperation opportunities to reduce the burden of our R&D costs.
Q: Can you comment on changes in the company's overall product ASP this year?
A: In 2011 we will ship more models with touch screens and QWERTY keypads, which carry higher prices than feature phones. Overall ASP for the year is expected to surpass US$46, up from US$38 in 2010.
Of Arima's total handset shipments this year, more than 50% will be touch screen phones. Based on the estimate, shipments of touch screen models are likely to account for 65-70% of company revenues in 2011.
Arima president Owen Chen
Digitimes file photo
Article translated by Jessie Shen
