Fri Jun 3, 6:20 AM ET

TAIPEI (Reuters) - Taiwan`s hardware firms happily cashed in on the boom in digital music players created by Apple Computer Inc`s (Nasdaq:AAPL - news) iPod, but what seems the next logical step -- portable video -- may be an idea ahead of its time.

Analysts say it is easier to convince customers to shell out US$400-800 on a fancy mobile phone with PDA and media player functions than to tempt them to pay a similar price and watch movies on a screen the size of a business card while on the go.

Using the devices also requires customers to convert content into a dizzying array of formats -- a prospect that can discourage all but the most hardcore of techies.

Taiwan`s Kinpo Electronics Inc. (2312.TW) saw plenty of interest but few sales for its portable video player with a 40 gigabyte hard drive at the Computex computer trade show in Taiwan, said saleswoman Kathy Lin tending the company booth.

``Many people have come to ask about it, but actual orders are very few,`` Lin said. ``Prices are high, so buying interest is a little weaker.``

In Taiwan, gadgets like Kinpo`s player retail for up to T$18,000 (US$575).

For just slightly more, consumers could get a combination personal digital assistant (PDA) and phone from Taiwan`s High Tech Computer Corp. (HTC) (2498.TW), whose booming sales have made it one of Taiwan`s hottest stocks this year.

It, too, plays MP3 audio and digital video, but also sports a built-in camera and Bluetooth wireless connection, lacking only the massive storage capacity of hard drives that most personal media players need to play programs taking up hundreds of megabytes of data.

DOUBTFUL DEMAND

Tech market analysts International Data Corp (IDC) say the personal media player represents the next step in the evolution of portable entertainment, but also cast doubt on demand.

``In addition to a hefty price tag, PMPs are also competing with a host of other converged devices such as the new Photo iPod, cell phones, new handheld gaming decks and portable DVD players,`` IDC said in a recent report.

``In the future, portable video players will remain a wild card, given unproven demand and the very early stages of commercial digital video services,`` it said.

Other mobile devices, like PDA phones and smart phones, are of much more interest in the near-term to major firms like motherboard maker Asustek Computer Inc. (2357.TW) and BenQ Corp. (2352.TW), which could easily enter the video market if they felt demand was there, said Deutsche Securities analyst K.C. Kao.

``The phone is a mass market, they are the mainstream,`` Kao said in a research note. ``(Taiwan companies) would rather allocate resources to make PDA phones or smart phones.``

HTC itself has no announced plans to boost its video offerings, and is banking a hot new product to power the second half of the year -- a phone shaped like a tiny palm-sized laptop computer that is one of the first to allow high-speed Web surfing using third generation (3G) wireless technology.

``The overall market response is very positive, we`re very excited,`` HTC President Peter Chou told Reuters in a recent interview. ``People like this device.`` (US$1 = T$31.3) REUTERS mik