TRi: Taiwan's Notebook PC Shipments Will Top 100 M. in Second Half

Global shipments of notebook PCs (including traditional notebook PCs, netbooks, and slate PCs) declined 11.2% quarter-on-quarter (QoQ) in the first three months of this year, a normal level for the low season, according to the Topology Research Institute (TRi), the largest private market research company in Taiwan.

TRi said that global notebook PC shipments resumed positive growth in the second quarter, with an estimated 5.4% QoQ increase, and that an estimated 96.9 million notebook PCs were expected to be shipped in the first half of the year.

Important points affecting the second-half notebook PC market, according to TRi, will be back-to-school purchases in September and the long October 1 holiday in mainland China. If the European debt crisis can be controlled, the company said, notebook PC sales in the second half can be expected to continue into the Christmas sales peak in Europe and the U.S., helping global shipments to continue growing at a stable pace until the end of 2010.

With the potential for replacement purchases by enterprises, TRi added, global notebook PC shipments in the second half are expected to reach 113 million units, a 17.4% increase from the first half. Shipments for the whole year are forecast to reach about 210 million, a 25% year-on-year (YoY) increase.

Taiwan, as the world's largest supplier of notebook PCs, is expected to deliver more than 100 million such devices in the second half.

Recovery of Demand

Despite such troubles as labor shortages in China, the debt crisis in Europe, and the disruption of European travel by volcanic ash, total notebook PC shipments by Taiwan-based ODMs (original design manufacturers) in the first half saw a YoY increase of more than 40%. Shipments by the two top suppliers, Compal Electronics Inc. and Quanta Computer Inc., grew 97% and 60%, respectively.

TRi pointed out that strong demand in the first half implied a resurgence of consumer demand from the bottom in conjunction with the economic recovery and the debut of Microsoft's Windows 7 operating system. The market research firm estimated that some 104 million notebook PCs were shipped by Taiwanese companies, among which shipments by the Wistron Corp. and Quanta were expected to enjoy YoY growth rates of more than 22%.

Some market observers worry that the euro appreciation and rising costs will drive brands and contract suppliers to hike notebook PC prices in the third quarter. TRi said that the price hikes should not be too serious, but that some brands might boost prices in conjunction with changed specifications; they might upgrade hard-disk storage capacity, for example, or adjust their product mixture by such means as reducing shipments of low-margin netbooks.

In conclusion, TRi said that netbooks would no longer enjoy annual growth rates of more than 100% because more and more traditional notebook PCs are cutting weight and thickness and because cost/performance (C/P) concerns are becoming more prevalent. The market research firm predicted that the growth of netbook PC shipments would return to a normal level this year, and that slate PCs would become star products with a growth of 19% in 2010.

TRi expects some 13.5 million slate PCs to be shipped this year, accounting for 6% of overall notebook PC shipments. The research firm predicts that shipments of slate PCs will outpace those of netbooks in 2012.

The design concepts of slate PCs are similar to those of notebook PCs and smartphones, so most of the key parts can be shared. Since the technology threshold is not very high, TRi said, companies large and small will continue to promote these or similar devices in the market. Asustek Computer Inc. (Asus) and Micro-Star International Co. (MSI), for example, each unveiled four slate PC models at 2010 Computex Taipei (Taipei International Information Technology Show) in early June.

Among the increasing number of slate PC models, TRi said, Apple's iPad is expected to maintain its position as market leader thanks to its smooth interface and the availability of plenty of application software at its online store. (QL, June 2010)