Wireless Terminal ODM Players

Is it a Sony Ericsson? Is it a Motorola? No, it might actually be a GVC or a BenQ.. With the outsourcing of development as
well as manufacturing to Original Design Manufacturing (ODM) companies, the old value chain of the mobile terminal market goes up in smoke. Northstream, leading wireless advisor, predicts that ODM products grow rapidly and account for up to 40 percent of the mobile terminals' market by 2005. Here
lies new opportunities but also challenges for both operators and vendors. Inset is the President of Northstream Bengt Nordström.

Development and manufacturing of mobile phones is not what it used to be.
- Are you the proud owner of a Motorola T191 or C300, or perhaps of a Sony
Ericsson T200 or R600? Then you probably think that Motorola and Sony
Ericsson are the companies that have developed these phones, says Anders
Lindqvist, senior advisor at Northstream. - In the case of Motorola,
Taiwanese-based BenQ has developed and produced both the T191 and the C300.
And for Sony Ericsson T200 and R600, GVC - the mobile arm of Lite-On
Technology - is the Taiwanese ODM company behind these terminals.

These are just examples of mobile phones that increasingly are developed by
ODM companies. ODM is a phenomenon that rapidly has become a powerful
ingredient in the recipe for how to make a mobile phone. Established
manufacturers rely on previously unknown sub-suppliers to minimise risks and
efforts in the process of expanding and maintaining their product
portfolios. Northstream predicts the ODM share of the total market to grow
from 7-8 percent 2002 to beyond 40 percent in 2005.

Many mobile terminal vendors, with Motorola and Sony Ericsson as the
frontrunners, have started to purchase phones from ODMs in order to complete
their product portfolio, reduce internal R&D costs and introduce new
concepts to try the market with minimal financial risk. Another example is
Microsoft who has started to use ODMs as an alternative means to introduce
Microsoft-powered handsets to the market.

Taiwan is by far the most dominating country with regards to the number of
mobile terminal ODM companies as well as handset shipments. Korea holds
second place, but other regions have started to challenge Asian domination.
One example is Finland-based Microcell, the ODM behind Sony Ericsson's T66,
a good example of a new terminal ODM player.

- The rise of the ODM force and new business models will completely change
the value chain for mobile terminals, says Anders Lindqvist. - Handset
vendors will find new means of developing their portfolio, while operators
will see new possibilities to source customized handsets, not necessarily
from traditional well known vendors.

Meet Northstream in Cannes at the 3GSM World Congress, Hall 2 stand F57 and
Hospitality Suite 301 and 303

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