Original design manufacturers (ODMs) including Quanta and Wiston Wiwynn are benefiting from moves by big internet service providers to keep costs low.
According to a report in Digitimes, the ISPs are choosing the so-called white box manufacturers like Quanta and Wistron because they don’t see any need to have branded servers in their data centres.
That is likely to hit Hewlett-Packard and Dell.
There’s no systematic let up in server demand, the report said. Sales are steady at 10 million units this year.
The report said Google, Facebook and Amazon are voting with their wallets by adopting servers from the ODMs.
Quanta was well known as being a major ODM of notebooks, but it has diversified into white box servers that now represent just over a third of its revenues.
Despite 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.
The 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.
We’ve seen recently that companies that specialise in making notebooks for others – so called original design manufacturers (ODMs) – have been cautious about the outlook for the future.
Last week, Taiwanese ODM Quanta said it didn’t expect anything great from notebook sales. It has diversified its business to sell servers direct and to manufacture watces for Apple.
And today, another major Taiwanese ODM, Wiston, said it didn’t expect a lot of growth in the notebook market in the second half of this year.
According to a report in Digitimes, Wistron saw a precipitous drop in notebook shipments in the first half of this year, and the second half looks little better.
Like Quanta, Wistron is hoping to diversify its business by manufacturing other electronic devices and elements.
The writing has been on the wall for X86 notebooks for quite a few quarters now, and it looks like the era of the Windows Intel duopoly is more or less over and done.
IBM has added an open access cloud service to the OpenPOWER alliance.
The alliance includes Nvidia, Mellanox, Google, Tyan and dozens of other vendors.
Big Blue said it has added SuperVessel to the global community of developers who have bought into the OpenPOWER alliance.
SuperVessel is based on IBM’s proprietary POWER processors and the cloud consists of those along with FPGAs and graphics processors to give faster service. OpenStack is used to manage the whole cloud.
SuperVessel consists of online virtual laboratories where developers can access open source software and build and test applications. The “labs” include Big Data, the Internet of Things, and virtualisation on POWER processors.
Xilinx is providing the PGA accelerators for the SuperVessel cloud service in a bid to make computing faster.
Other of the 113 members of the OpenPOWER alliance include Samsung, Wistron, ZTE, Hitachi and Altera – shortly to be acquired by the Intel Corporation.
Although 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.
Reports 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.
Microsoft is set to enjoy kick-backs from ODMs and others as the world goes slate-crazy, thanks to the intellectual property it owns in its legion.
Original Design Manufacturing giant Wistron has just signed a patent licensing agreement with Microsoft particularly for tablets, mobiles, e-readers and other devices running Android or Chrome software.
An industry watcher, familiar with the situation, tells us Microsoft is in an interesting position.
We’re told most of the smartphone and tablet manufacturers are, in theory, breaching patents that Microsoft holds. Certainly, they’ve signed patent agreements over Android.
While Microsoft could treat it as more of a cash cow, our source tells us it needs to keep the hardware vendors on the sweet side.
But, as Microsoft says in its statements and through its policy, patent agreements underline the importance of IP to Redmond.
Essentially, we can expect to see further agreements with the Vole, as Microsoft taps into its rich portfolio when it sees fit.
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.
Gigantic Taiwanese ODM Compal wants to cosy up to LG Display to focus on component production, according to a statement it posted to the Taiwan Stock Exchange.
Compal is planning to bung around $7.35 million into the project. As is often the case around Asia, Taiwanese Compal and Korean LG will be looking to the cheap labour and people power of China for production – the venture is expected to plant its roots in Kunshan, Jiangsu Province.
The capital size, reports Focus Taiwan, is set at $15 million – the publication reckons Compal will be taking the 49 percen stake while LG will have the small majority with 51 percent. Research and development will also be on the cards.
Yesterday Reuters reported that Taiwan stocks were crashing 0.64 percent, following Wall Street, but Compal was the only survivor and in fact on the up. We wonder if mutterings around the Taiwan Stock Exchange about the venture with LG had anything to do with it – probably.
The venture may be win win for Compal, piggybacking off LG to get it orders from mainland China TV brands already working with LG, reckons DigiTimes’ sauces.
It’s thought that the joint operation will also focus on research and development in the notebook production assembly and marketing spaces. Apparently both Compal and LG are working out the kinks in the finer details. Along with Wistron and Quanta, Compal is one of Taiwan’s biggest ODMs and likes to keep a low profile while maintaining a high back-end. It’s not the sort to issue statements willy-nilly so we’re guessing it’s serious on this one.