Notebook PC Shipments in Greater China to Remain Flat: MIC

Shipments of notebook PCs in the Greater China region will be flat in 2009 and average selling price (ASP) will continue to decline, according to a forecast by the Market Intelligence Center (MIC) of the Institute for Information Industry.

This might mean a decline in overall production value while stimulating even stronger demand in some emerging markets; and that, the MIC said, might eliminate some of the negative impact on the market.

Statistics compiled by MIC show that a total of 112 million notebook PCs were shipped in the Greater China region in 2008, generating an overall production value of $57.3 billion. MIC industry analyst Huang Yi-hsuan pointed out that the rapid development of the netbook (mini-note PC) sector since the second half of 2008 has been eating away at the market share of mainstream notebook PC models. The global economic recession has led to conservative attitudes among both notebook PC vendors and contract assemblers in Greater China, which accounts for most global production.

In the fourth quarter of 2008, worldwide notebook PC shipments amounted to 30.43 million units, up 10.4 percent from the previous quarter; this relatively low growth rate, the MIC explained, was due to unfavorable economic conditions and weak consumer confidence, which prompted most vendors to hold to a wait-and-see attitude and to be cautious about placing orders.

Global notebook PC shipments this year are forecast to maintain the 2008 level, Huang noted, adding that some of the negative factors affecting the market will be offset by positive trends such as desktop replacement (the continuous replacement of desktop computers by notebook PCs), a high growth in demand in emerging markets, and falling materials prices.

The global production value of the notebook PC industry reached $15.3 billion in the fourth quarter of 2008, down 0.7 percent from the previous quarter, while the average selling price fell to $503. Huang explained that the decline in production value was the result of falling shipments of high level and business models, reduced sales of new products due to price cutting promotions for older products, the netbook replacement trend, and price drops for some upstream materials and parts.

The netbook invasion
The MIC predicted that worldwide netbook shipments would enjoy explosive growth this year, soaring by at least 100 percent from 2008 to reach around 23 million units.

Ku Wei-ya, another industry analyst at MIC, said that the netbook sector would face a specification shift in the first quarter of this year, with 10 inch display models replacing 8.9 inch products as the market mainstay. Most major nameplates in the market, notably Acer and Dell, will soon introduce 10 inch models and other manufacturers will follow.

Declining motherboards
Worldwide motherboard shipments are predicted to decrease by 10 percent in 2009 due to negative economic factors, the limited sale-boosting effect of new software and hardware products, and high distributor inventories. The downturn will continue, MIC believes, until strong demand from emerging markets pulls motherboards out of their slump.

The MIC reports that worldwide motherboard shipments reached 146.7 million units in 2008, down 4 percent from the previous year. The fourth quarter saw shipments fall 18 percent on an annual basis and 15 percent from the previous quarter.

Heads in the cloud
Taiwan`s server industry suffered a 2.1 percent annualized decline in shipments and a 2.5 percent drop in production value in the fourth quarter of 2008, according to the MIC, which attributed the shrinkage to worse-than-expected server sales in emerging markets as well as weak demand in North America and Western Europe. MIC pointed out that the sever industry has to provide more value-added service solutions if it is to prosper in today`s challenging environment.

Servers used for so-called "cloud computing", or Internet-based computing service, are expected to be the major driving force in the information technology (IT) market this year, the MIC said. This will bolster makers of servers and motherboards.

More and more big international companies are competing for this lucrative business in 2009, according to the MIC, including IBM, HP, Intel, Google, and Yahoo. Their efforts are expected to have a direct impact on the server industry`s production value, and perhaps even to help boost global corporate IT spending by about 5 percent.

Source: CENS