Compal obtains contract orders for 3G handsets from Motorola

Taipei, July 5, 2005 (CENS)--Compal Electronics Inc., a flagship of the Kinpo-Compal Group, has received contract orders for third-generation (3G) mobile phone handsets from Motorola Inc., a global leader in providing integrated communications solutions and embedded electronic solutions, confirmed Hsu Sheng-hsiung, chairman of the Kinpo-Compal Group.

Hsu said his group would launch 100 models of handsets, including some under-developed 3G handsets. Seeing the bright outlook of the 3G handsets, the group is dedicated to putting more emphasis on the development of the lucrative products in the foreseeable future.

Prior Hsu's confirmation, there was a rumor that Motorola's placing contract orders with Compal is closely related to Kinpo-Compal Group's another subsidiary—Vibo Telecommunications Inc., which has adopted a spate of telecom equipment provided by Motorola.

An industry analyst noted the contract orders released by Motorola to Compal are designed to compensate for the losses incurred by the later because it has encountered a cut of contract orders for MPx smart phone handsets from the former.

As Compal's PMCC ( personal mobile communication and computer) business division, which is in charge of developing handheld devices, will soon merge with Compal Communications Inc., another subsidiary of the Kinpo-Compal Group, the Motorola orders will naturally be switched to Compal Communications. Because of the acquisition of the switched orders, Compal Communications will see its orders expanded to 3G handsets from the past 2.5th-generation ones.

It is said that Compal will cooperate with Motorola for the production of 3G handsets on an OEM (original equipment manufacturer) basis, rather than the ODM (original design manufacturer) basis seen in the past cooperation for the production of smart phones. In other words, Motorola will be responsible for the design of system, software and hardware, while Compal will be in charge of part of mechanical designs and assembling.