Total worldwide shipments of Bluetooth devices are forecast to exceed 200 million units in 2005. The Industrial Economics and Knowledge Center (IEK) of Taiwan's Industrial Technology Research Institute (ITRI) estimated 2005 worldwide shipments at 213.8 million units.
Combined data from the IEK and interviewed-supplier estimates place Bluetooth production from Greater China, which comprises mainland China, Taiwan and Hong Kong, at 32.41 million units for 2004. Exports for the same year reached 30.77 million units, or 27 percent of total worldwide shipments.
This report profiles 43 Bluetooth device makers: 25 based in Taiwan, 12 based in mainland China and six based in Hong Kong. Their total production in 2004 reached 9.22 million units. They exported 7.83 million units, equivalent to 85 percent of their total output. Their target output and exports for 2005 are 19.40 million units and 17.43 million units respectively.
Manufacturing Centers
• There are over 155 makers of Bluetooth devices across Greater China. About 54 percent of production is handled in mainland China.
• All Hong Kong makers produce their Bluetooth devices in mainland China.
• Taiwan makers for the most part maintain production on the island. Only 44 percent of the makers in this report have facilities on the mainland.
Production
• Taiwan made 25.94 million Bluetooth products in 2004, according to the ITRI.
• Aggregate output for 2004 from the Taiwan-based suppliers in this report was 5.58 million units. The projected output from these companies in 2005 is 10.99 million units.
• Mainland China-based suppliers covered by the report produced 1.47 million units in 2004. They are targeting an output of 3.31 million units in 2005.
• Hong Kong-owned suppliers produced 2.17 million units in 2004. They plan to increase output to 5.10 million units in 2005.
Exports
• Interviewed Taiwan-based suppliers shipped 4.5 million units in 2004, 81 percent of their total output for the same year. Their target export volume for 2005 is 9.61 million units, or 87 percent of their output for 2005.
• Mainland China-based suppliers shipped 84 percent of their output in 2004, or 1.23 million units. They are targeting to ship 2.92 million units in 2005.
• Hong Kong-based suppliers exported 2.10 million units, or 97 percent of their production in 2004. The export target for 2005 is 4.90 million units.
Product and Price Trends
• Headsets dominate Bluetooth production among Greater China makers, followed by dongles.
• Bluetooth 1.1 applications are pervasive. A growing supply of devices is supporting Bluetooth 1.2 Class 2. Makers have announced plans to develop and release devices based on Bluetooth 2.0.
• Most makers use CSR chipsets. Other chipset suppliers include TI, STMicroelectronics, Infineon and Philips.
Industry Overview
The Bluetooth industry is poised to continue expanding exponentially over the next few years. In 2001, only 7.2 million Bluetooth solutions in various form factors were shipped. This grew five times within the next year. By 2006, annual Bluetooth product shipments are expected to surpass 1 billion units.
Worldwide Bluetooth shipments in 2004 were estimated at 110 million to 140 million units. A recent study by market research firm In-Stat/MDR estimated that 146 million Bluetooth chipsets were shipped in 2004. Forecasts for 2005 placed shipments between 210 million and 280 million Bluetooth products.
Taiwan's Industrial Economics and Knowledge Center (IEK), an arm of the government-sponsored Industrial Technology Research Institute (ITRI) placed 2004 shipments at 115.6 million units, and shipments for 2005 at 213.8 million units.
Taiwan is currently driving the Bluetooth manufacturing industry in Greater China. Taiwan's Bluetooth industry has experienced significant growth in the last three quarters. Projected total production value grew 145 percent from US$184 million in 2003 to US$450 million in 2004. With worldwide demand forecast to exceed 200 million units in 2005, Bluetooth production in Taiwan is forecast to increase by 79 percent to 46.5 million units next year. Production value is expected to reach US$665.6 million.
According to the ITRI, the island's share of the Bluetooth market increased from 14.5 percent in 2003 to 22.5 percent in 2004. To further increase its share and stay competitive in the headset and dongle lines, many Taiwan suppliers are attempting to break into the Bluetooth mobile phone and notebook PC markets. However, these plans are unlikely to succeed as major firms, such as Samsung and Nokia, intend to retain in-house production of mid-range to high-end mobile phones.
Greater China Supplier Base
The number of Bluetooth manufacturers in Taiwan grew to exceed 100 in 2004. These companies offer a complete Bluetooth-product supply chain, from upstream services such as IC design, chip manufacture, module assembly and software development to low-end services such as application product development, production and branded product sales.
Taiwan's downstream companies specialize in developing products based on imported chipsets. These firms are wary about adopting Bluetooth chips produced by local IC foundries, which are generally new to the field.
This means that Taiwan's Bluetooth industry will continue to be focused on downstream manufacturing, with a few makers specializing in module development. Downstream production contributed 77 percent of the total 2004 output.
To date, mainland China accounts for about one percent of the world's Bluetooth shipments. Still in its infancy, the country's Bluetooth industry has about 25 local manufacturers. In 2004, although some companies left the line, new entrants kept the supplier base at previous numbers.
Surveyed makers from mainland China shipped 1.23 million units last year. These companies account for 60 percent to 70 percent of the country's total production. Scheduled new product releases have these firms projecting an increase of 125.17 percent in output for this year.
Aggregate shipments from interviewed makers from Hong Kong totaled 2.10 million units in 2004. Hong Kong's first Bluetooth manufacturers emerged in 2001.
Supplier Profile
Antonio Precise Products Mfy Ltd
Antonio Precise Products Mfy Ltd specializes in the design and production of headphones and headsets. Established in 1982, the company began producing Bluetooth-enabled devices in 2002, and has since joined the Bluetooth Qualification Body (BQB). Its Bluetooth product range includes headsets, handsfree kits, dongles and modules.
In 2000, Antonio received a quality award for its products from the Trade and Industry Department of Hong Kong. The company transferred its head office to Hong Kong Science Park in early 2004. It also set up an R&D center to accommodate its R&D department, which comprises over 40 members.
The rest of the 80-member team at the head office work in sales and marketing, logistics and general administration. Antonio also maintains an office in Shanghai, which is responsible for marketing activities in mainland China.
The firm is 100 percent privately owned. It is the core of a group of four companies, which includes Sun Fat Electronics & Plastics Fty and Avantwave Ltd. Sun Fat serves as Antonio's production base and is located in Shenzhen, Guangdong province. Avantwave is a subsidiary company of Antonio with an office in Hong Kong. It is responsible for the whole group's wireless and Bluetooth solutions.
Exports currently take up the majority of Antonio's output, with North America and Europe each accounting for 45 percent of shipments. Deliveries to Asia account for another 8 percent. OEM and ODM buyers absorb most of the firm's orders. Ongoing enhancements to the R&D team are expected to beef up the company's ODM capabilities.
Antonio considers Bluetooth products the strongest area of growth for the whole group.
The company expects both export and output growth to range from 30 percent to 50 percent in 2005, with the lucrative United States market as the main growth driver.
Manufacturing Capability
Production is mainly done in Antonio's 30,000-square-meter factory in the Bao'an district of Shenzhen. The facility comprises six production buildings with separate workshops for the different manufacturing processes.
Antonio's production facilities are ISO 9001- and ISO 14001-certified. The company is currently in the process of applying for its ERP certificate.
The facility includes an office building, a computer center, a staff training center, a medical and health-care center, a staff club and a restaurant for Antonio's more than 3,500 employees.
Antonio's SMT workshop is currently being expanded. The company plans to add one more SMT line by the end of 2005 and up to another five lines in the long term. At present, the SMT workshop is equipped with a high-speed chip shooter, a KS-1700 fully automated printer from Japan's Juki Corp. and an ETC AIS-20-82-C lead-free reflow oven from Eightech. A KE-2020 flexible mounter, also from Juki, can process chips at a rate of 11,000cph and ICs at a rate of 1,800cph. It accommodates chip sizes from 0.2mm to 50mm. The SMT workshop is also equipped with a vision centering system. The company has a total of 43 final assembly lines. The lines are outfitted with wave-soldering machines, high-frequency welding machines, heat-sealing machines, shrink wrap machines, high-frequency shielding rooms, audio sweepers, signal generators, oscilloscopes and digital impedance meters.
All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
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