Tag: Compal

PC sales continue to fall

IBM PCDespite optimistic noises from vendors that the fourth calendar quarter would see a rebound in sales of PCs, it just does not seem to be happening.

According to the Taipei Times, Asustek, Wistron and Compal have all seen drops of sales.

A senior executive at Asustek told the newspaper that there’s still fundamental weakness in the marketplace.

Compal saw sales fall by 9.91 percent in October compared to October in 2014, while sales fell 19.49 percent compared to September 2015.

Meanwhile, another Taiwanese news feed – Digitimes – said that Compal and Wistron saw sales of notebooks decline. In Compal’s case, it shipped 32.4 million notebooks in the first 10 months of this year, and that’s a fall of 2.6 million units compared to the same period last year.

Compal, however, is shielding itself from being hit on the desktop and notebook side by developing a pretty robust server business.

Notebook shipments up in August

Compaq 386The news for vendors of notebooks hasn’t been good for many quarters now but it appears August offers a glimmer of hope for the manufacturers.

Digitimes Research (DR) said that the top five brands showed growth of 17 percent in August, over July’s figures.

In more rosy times, August was the month that manufacturers prepared machines for the “back to school” period but that patterns been disrupted for some years now.

DR said that out of the top five vendors, HP, Lenovo and Acer had a healthy August showing growth of 30 percent, 30 percent and 40 percent respectively.

But the shipments were not too good for Asustek and Dell, which showed weak growth, with DR believing the latter suffered from lack of demand in the commercial sector.

Meanwhile, the original design manufacturers – that is to say the companies that actually make the kit that is later branded, also did well, with Quanta, Compal and Wistron all seeing growth for the period.

DR believes it’s impossible right now to gauge the effect of Windows 10 on notebook sales.

And while many of the companies showed growth in shipments, those aren’t sales.

Q3 notebook shipments to fall sharply

Dell logoTaiwan accounts for 81.6 percent of the notebooks that ship worldwide and it appears that the downward trend of sales will continue throughout this year.

The prediction comes in the wake of results from CPU manufacturers Intel and AMD this week, and certainly means that other component suppliers are feeling the squeeze.

Digitimes Research (DR) predicts that over 32 million notebooks will ship during the third calendar quarter – that’s down by 12.2 percent on the same calendar quarter last year.

The third quarter was traditionally a buoyant period for notebook sales, but that pattern seems to have been disrupted.

DR said that of the 32 million shipping, HP will be the biggest customer responsible for a quarter of shipments, Dell 17 percent, Apple 14.3 percent, Asustek 11.2 percent, Acer 10.9 percent, Lenovo 10.6 percent and Toshiba 4.4 percent.

The biggest original design manufacturer (ODM) will be Quanta, then Compal, Wistron, Pegatron and Inventec. Of these, Quanta and Compal have 32.8 percent and 31.9 percent of the ODM market, said Digitimes Research.

Intel plunges more money into tablets

Dell TabletAlthough chip giant Intel has already taken a considerable beating because of its commitment to become a leading player in the mobile and tablet market, it seems that it doesn’t feel it’s spent quite enough yet.

According to Taiwanese wire Digitimes, Intel is going to create reference designs for the Android operating system in the second half of this year in a bid to help so-called “white box” manufacturers make and sell cheap tablets.

“White box” goods are unbranded products which distributors and others can then pick up and re-brand with their own je ne sais quois.

The Chinese white-box tablet market has, according to several market research companies, already taken a whack as demand falls because the replacement cycle for these devices isn’t on a very regular basis.

But Intel wants tablets to use its SoFIA processors and prices for 10 inch, 8 inch and seven inch LTE and 3G tablets at prices of around $130, $90, and $80.

It isn’t just Chinese manufacturers who will benefit from Intel’s largesse – the same report said that well known names including Foxconn, Compal,  Pegatron, Wistron and Elitegroup will all give the Intel scheme a go.

Meanwhile, the research arm of Digitimes reported that there is such a huge stock of cheap notebooks in 2015 that manufacturers are complaining of the “worst ever” decline in shipments.

Apple adds firms to watch portfolio

Apple watchReports that demand for the Apple watch is such that the company may have trouble supplying the demand it has created has caused it to seek new manufacturing partners.

A report on Taiwanese wire Digitimes said that it has added Compal and Wistron to its existing clutch of Far East suppliers.

But it’s not just demand that’s causing it to choose these two original design manufacturers (ODMs).

Apple plays the game of setting its suppliers against each other so they compete on cost and allow the US firm to increase its gross margins on products.

The same report on Digitimes claimed that it’s not just the Apple watch which will be built by the two Taiwanese ODMs – they will also have a share in making iPhones.

A market research firm – Slice Intelligence – believes that 957,000 Americans placed firm orders for the Apple watch.

Meanwhile, Google is reacting to Apple’s launch by introducing new features to its Android Wear software.

Updates to the Google Android Wear software will apply to the seven models of watches available on the market.

Tablets start to dominate Taiwanese ODM production

Taiwanese original design manufacturer (ODM) Compal is one of three or four companies that put together notebooks and now tablets for  And according to Taiwanese wire Digitimes, Compal is responding positively to the changes in the device market.

A few years ago, Compal’s business was making notebooks and netbooks, pure and simple.  But, the wire reports, although notebooks were the bread and butter for ODMs, Compal shipped 3.8 million notebooks and 400,000 tablets in the month of March.  That’s a 40 percent rise in shipments, month on month.

The report indicates that most of the notebook growth came from an order from Dell, for business machines.

Compal began shipping tablets to Acer in the first quarter of this year and shipping Amazon seven inch tablets in Q3 2013.  Acer has already committed to putting its weight behind the burgeoning tablet market.

Meanwhile, the same wire reports that the next iPad, a 9.7-inch device with a thinner and lighter profile, will start in July of this year, with LG Display and Sharp winning out on the display front.

Quanta builds half of all HP notebooks

Taiwanese ODM Quanta will make half of the notebooks HP sells next year, according to reports..

In 2012 HP outsourced 40 per cent of its notebook orders to Quanta and has just upped the figure.

Digitimes, which is quoting sources from the upstream supply chain, said that HP’s estimated notebook shipment volume will be 40 million units next year so Quanta will make about 20 million notebooks.

This will allow the company to stay ahead of its biggest rival Compal.

The move appears to have come at the expense of Foxconn. The company had 20 percent of HP’s orders in 2012 but will not get any in 2013.

This means the company will only have notebook orders from Sony and a few MacBook Pro orders from Apple for 2013.

Digitimes said that this means that Foxconn’s invasion into the notebook manufacturing market for the past two years is over.

Wistron has also seen its orders drop. In 2012 it was looking after 16 percent of HP’s orders while this year it will only get seven percent. Compal received a similar percentage as Wistron with 7-8 percent. Compal is probably not too upset. It is the biggest winner in Acer and Dell’s notebook pie for 2013, landing 70 percent of Dell’s orders and a third of of Acer’s orders. This will mean that it will have to make 24 million notebooks.

The other big winner was Inventec which saw its percentage increase by more than a quarter.

Taiwanese firms see dismal results as Thai floods take effect

A number of Taiwanese manufacturers have posted negative results, variously hit by Thai floods and a precarious global economic situation.

PC maker Asustek announced that it now expects its revenues to take a knock due to the extensive flooding in Thailand, where much of the world’s hard drives are produced.  This has led to predictions that revenues will drop by five to 10 percent in the fourth quarter.

Previous expectations were that revenues would stay flat, but now Asustek will see a similar decline to that of rival Acer, which made a similar announcement last week.

Both firms will now raise average selling prices, as well as downgrading the hardware of some notebooks, as the price of hard disks begins to soar.

There is now an expectation that the hard drive shortage will directly impact on notebook prices by three to six percent, according to the Taipei Times.

Contract notebook manufacturers Quanta and Compal also announced that component shortages in Thailand would hurt shipments of devices in the fourth quarter.

The firms have adjusted their forecasts, and now believe that shipments will stay flat for the quarter or decline.

Quanta also suggested that production being slowed by Catcher Technology in China has impacted shipments.  This is due to Chinese authorities in Suzhou ordering production to be partly shut down due to environmental concerns last month.

Quanta still reckons it will see five to 10 percent more notebooks sold this year in total, up from 52.1 million last year.

Compal announced that it expects to be hit harder, with shipments expected to decline five to 10 percent in the upcoming quarter.

This means that Compal will ship between 40 to 42 million notebooks this year, down from its earlier forecast of 42 million.

Figures for next year are expected to see Ultrabooks to take up to 20 percent of shipments, though this may still fall far short of Intel’s high expectation for the devices in 2012.

Netbooks however are expected to account for less than 10 percent.

Contract electronics maker Hon Hai also reported disappointing results, though this is said to be attributable to the economic situation. 

The firm reported an 8.41 percent drop in its net income for the third quarter compared to a year earlier as industry slowdown hurt it sales of consumer electronics and PCs.

However on a quarterly basis Hon Hai saw its net income jump by 47.71 percent, said to be due to integration of its mechanical, optical and electrical businesses.

Flat panel maker Chimei Innolux also recorded third quarter results, notching up its fifth consecutive quarterly loss.  Losses expanded to $573 million in the third quarter, up from losses of $445 million in the preceding quarter.  This also compares unfavourably with losses last year of $130 million.

Toshiba sells Mexican LCD plant for peanuts

Just as Hitachi, Toshiba and Sony merge to create a monster in LCD, Toshiba is selling off one of its Central American plants in Mexico – to a bidder and friend in Taiwan’s Compal.

Compal is trying to move away from its total reliance on laptop display contracts as demand slips.

That’s why then, Compal has bought Toshiba’s TV production facility for peanuts. The word according to Taiwan Economic News is Toshiba was keen to sell the factory. It’s expected the deal sat between the $10 million and $17 million mark. It also signals an eagerness to take business from under the feet of successful Korean manufacturers like LG and Samsung.

Compal and Toshiba will hope to cut out the middleman and rubbish unnecessary costs. Toshiba is already one of Compal’s most important LCD TV contract buyers, making up half of Compal’s orders altogether, says CENS. 

Other, possibly attractive reasons for the buy are its relative closeness to the United States and easy passage into South America.

Meanwhile, as laptop demand falls, Compal wants to spread the revenue elsewhere in its company.

With a projection to ship eight million LCD TVs before the year’s end, and an operation boost from eight percent to 10 percent, it’s a deal between friends to maintain stability while stepping on the toes of that other Taiwanese rival, Wistron.

Flextronics ponders the future of notebooks

Giant supply company Flextronics is considering backing out of manufacturing notebooks, according to a report.

According to Digitimes, Flextronics now thinks making notebooks is not worth the candle, with margins dropping from a piffling three percent to a truly  frightful 1.5 percent.

The wire, quoting unnamed sources, reports that Flextronics hoped it could make a killing by making millions of notebooks a month, but it hasn’t received the orders it anticipated.

If the reports are true, Taiwanese ODMs (original design manufacturers) such as Wistron and Compal will make hay while the sun shines. And, of course, then there is Hon Hai (Foxconn), which no doubt will also benefit from the move if Flextronics truly has had enough pain.

ODMs make machines that then get logos put on them from the likes of Dell, Hewlett Packard and the rest.