Compal Communications lowers handset shipment targets Tweet

Handset maker Compal Communications has reduced its 2010 shipment target to 10 million units compared with shipments of 16 million units in 2009, according to company chairman Ray Chen.

The forecast adjustment is the result of lower-than-expected orders from Palm and feature phone clients, industry sources said.

The past two years have been tough for the Taiwan-based manufacturer, Chen conceded, but noted that shipments have bottomed in the first half of 2010 and will begin to rebound in the coming months with stronger smartphone orders.

Chen said the company expects to ship 10-16 million smartphones in 2011.

Palm represented 42% of Compal Electronics' first-quarter revenues, up from 12% in 2009. Since the company is actively redirecting its operations to the smartphone segment, Motorola's feature phone orders accounted for a mere 26% of revenues in the period, down from 68% in 2009.

Chen is bullish on HP's acquisition of Palm in the long run, pointing out that HP is an industry leading organization with excellent sales channel management. The merger will build on its competences, which is good news for its contract manufacturing partners.

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