Taiwan notebook shipments to grow only 3.3% in 4Q10, says Digitimes Research - ResearchInChina

Date:2010-10-28liaoyan  Text Size:

Despite the fact that notebook demand from consumers remains weak, Taiwan makers' notebook shipments in the fourth quarter of 2010 are expected to rebound as worldwide brand vendors' inventories were digested smoothly in the second half of the third quarter, according to Digitimes Research senior analyst Joanne Chien.

However, weak channel demand will cause brand vendors to sell their entry-level notebooks, which have lower profitability, as their major products in the fourth quarter. Therefore, shipping by sea will still be the vendors' priority choice for cost saving, and in order to catch up with shipping schedules, Taiwan makers' notebook shipments have seen an obvious growth recently; however, it is still unlikely to prop up total shipments for the quarter. Chien estimates that Taiwan makers' notebook shipments will grow 3.3% sequentially with global notebook shipments to reach 51.23 million units.

As for weak notebook demand in the channel in the fourth quarter, in addition to Europe and the US, China's notebook market, which started to perform below expectations in the third quarter, did not perform as well as it has in previous years during the National Day holidays in 2010. Chien pointed out that the lower-than-expected performance was mainly due to rising inflation, while the China government also shows no sign of considering plans to constrain the rising prices and therefore, consumers in China have reduced their budgets, hurting notebook sales.

With notebook demand from China in the fourth quarter to remain weak due to inflation, Taiwan makers' order volumes from China-based Lenovo will also be lower than in previous quarters. Toshiba, which suffered from high-levels of inventory in the third quarter, will increase its order volumes in the fourth quarter, while Dell, which will push entry-level models into the consumer market aggressively in the fourth quarter, will also raise its order volumes to Taiwan makers significantly. Toshiba and Dell will be the top-two vendors increasing orders to Taiwan makers in the fourth quarter.

As for notebook makers, Chien pointed out that Quanta Computer, Compal Electronics and Wistron will see their shipments in the fourth quarter rise 4-5% sequentially as some of their clients have increased their orders, while most other clients are maintaining their shipment volumes. Pegatron Technology and Inventec will both see drops in their fourth-quarter shipments. Pegatron's share of Asustek's notebook orders will drop from over 95% to 92% in the fourth quarter as Quanta grabbed some of Asustek's orders.

Digitimes Research: Taiwan makers total notebook shipments 1Q10-4Q10 (k units)

1Q10

2Q10

3Q10

4Q10

TW shipments

42,506

44,906

44,204

45,649

TW Q/Q

(7.7%)

5.6%

(1.6%)

3.3%

TW Y/Y

56.4%

36.4%

7.9%

(0.9%)

Global market share

89%

91.2%

89.1%

89.1%

* Note: The figures include shipments of netbooks
Source: Digitimes Research, compiled by Digitimes, October 2010

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