A bi-weekly snapshot of Taiwan business news stories brought to you by CommonWealth and AmCham Taipei’s TOPICS
Sales of iPhone 12 predicted to set record
Apple’s newest offering, the iPhone 12, went on sale in Taiwan on October 23. Taiwan’s three largest telecoms operators – Chunghwa Telecom, Taiwan Mobile, and Far EasTone – have indicated that pre-orders of the new smartphone have eclipsed those of the iPhone 11, which debuted last year. Of those companies, Taiwan Mobile’s pre-order sales of the iPhone 12 were two to three times those of Apple’s previous generation of smartphone, while Far EasTone’s pre-orders more than tripled from last year.
Taiwan Star Telecom General Manager Cliff Lai said that sales of the iPhone 11 series were outstanding after Apple initiated price cuts upon its debut, which increased the company’s share of the Taiwan market to 20%. With the rollout of 5G, total sales of the iPhone 12 are expected to surpass those of the iPhone 6, which sold 1.7 million units when it became available in 2014. Since then, it has been difficult for successive generations of smartphone to pass that benchmark.
E-commerce giant Taobao declares Taiwan exit
Chinese e-commerce website operator Taobao on October 15 announced that it would formally exit the Taiwan market at the end of December, citing “market uncertainties.” Taobao’s exit follows on the heels of the announcement by the Taiwan agent for Chinese company iQiyi that it would be ending its relationship with the online video platform.
The recent developments signal an effort by the Ministry of Economic Affairs to halt the operation of online enterprises from the People’s Republic of China in Taiwan. It is also a sign that the deterioration of cross-Strait relations has begun affecting business operations and market entry for companies on each side of the Taiwan Strait.
The MOEA’s Investment Commission (IC) had concerns that Alibaba Group Holding Ltd., the parent company of Taobao, maintained significant control of the company’s operations in Taiwan, a violation of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area.
Taobao, China’s largest customer-to-customer (C2C) e-commerce platform, began operating in Taiwan in October 2019. In order to avoid triggering regulations regarding investment by a PRC company, Alibaba invested in the Taiwan affiliate’s businesses, including both C2C and business-to-consumer (B2C) services, through the UK-registered Claddagh Venture Investment Ltd.
However, the IC determined that Alibaba’s ownership stake in Claddagh, while not reaching the 30% threshold, was significant enough to constitute a PRC investment and fined the company NT$410,000.
Taiwan’s computer brands come out ahead in Q3
Global sales of notebooks have boomed in recent months thanks to unprecedented demand for home office products amid the COVID-19 pandemic. Across the world, the number of PCs shipped in Q3 2020 exceeded 70 million units, a 3.6% rise from the same period last year.
Major Taiwanese computer brands Acer and Asustek have benefitted enormously from this phenomenon. Acer’s shipments of notebooks totaled 5.08 million in Q3, a 29.5% increase from last year. Asustek, meanwhile, shipped 4.75 million units, an annual growth rate of 12.9%.
As a result of the increased demand, rush orders of panels, printed circuit boards, and peripherals have been delayed due to limited stock. At a recent product launch, Acer Chairman and CEO Jason Chen noted that sales of the company’s notebook products are currently booming, with supply falling far short of demand. He predicted that the shortage of components would continue for some time.
As a dreaded second wave of coronavirus infections has now arrived in many countries and working from home becomes the new normal, it is expected that demand for notebooks and other related products will remain strong over the next two years.