TAIPEI - Apple's recent fortunes in the smartphone market may not be as bright as the colours of its new iPhone 5C, but this is unlikely to trouble its Taiwanese assemblers and suppliers as they tap into an emerging revenue source: Chinese companies.
Camera lens-maker Largan is enjoying a boom in Chinese orders; Quanta is a contract manufacturer for China Mobile's wireless routers, while Foxconn - which assembles iPhones and iPads - now also does assembly for mainland brands like Lenovo and Xiaomi Technology, dubbed China's Apple.
"Taiwanese companies have been diversifying their customer base since at least last year," said independent securities analyst Kuo Hai-pei.
Foxconn, the world's largest contract manufacturer, is said to have begun making smartphones for Xiaomi in the second half of last year.
The Beijing-based Xiaomi, founded in 2010, has quickly become one of the top brands in China with its sleek, high-end phones that cost only a third as much as the iPhone. Last year, it shipped 7.19 million phones and had revenues of 12.6 billion yuan (S$2.6 billion). Its target this year: 20 million phones.
Xiaomi founder and president Lin Bin said in April it will extend its partnerships with Foxconn and Inventec Appliances, another Taiwanese assembler. Foxconn will also produce Xiaomi's new 7-inch tablet, according to reports.
Foxconn and Quanta declined to be interviewed, citing company policy.
The shift reflects the rise of cheaper handsets as newer models of smartphones appear to show diminishing returns.
Beyond its colourful plastic casings, the iPhone 5C, launched yesterday, is not expected to be too different from the iPhone 5, which has not sold well.
Shipments of iPhones are expected to grow just 10 per cent this year, compared to 46 per cent last year.
Meanwhile, global shipments of low-end and mid-range smartphones are expected to rise 37 per cent this year to 958 million units, accounting for more than 50 per cent of total shipments, market information advisory firm DisplaySearch estimates.
Apple's share of the global smartphone market slid from 16.6 per cent in the second quarter of 2012 to 13.1 per cent in the second quarter of this year, according to International Data Corp. Samsung's share shrank 1.8 percentage points to 30.4 per cent.
In contrast, Chinese makers Lenovo and ZTE grew from 3.1 per cent to 4.7 per cent and 4.1 per cent to 4.2 per cent respectively.
Taiwanese electronic component makers have lost little time latching on to the ascendant Chinese mobile phone market.
Chip-maker MediaTek, for example, is poised this year to ship 200 million smartphone chips, mostly to China, where it has captured 50 per cent of the market.
But with Apple expected to launch the iPhone 6 and perhaps even a smart television next year, Taiwanese makers are anticipating a rebound from their long-time partner, said Mr Darren Chen of Jih Sun Securities Investment Consulting.
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