Fitch Ratings said yesterday that the credit profiles of major Asian branded personal computer (PC) vendors are expected to remain healthy amid evolving market dynamics, bolstered by their operational and financial flexibility and an expected steady growth in shipments in the coming years.
"The continuous demand growth, robust financial profile and diversified business portfolio help mitigate the risk elements of intense competition and market cyclicality of the PC industry," Kevin Chang (張崇人), associate director at Fitch's Asia-Pacific Telecom, Media and Technology team, said in a report released yesterday.
"Although growth has moderated in recent years, the agency expects global PC unit shipment to grow around 10 percent annually in the next two years, with near-term growth momentum likely to be provided by Microsoft Vista operating system," Chang said.
Sustainable demand growth will be chiefly driven by rising PC penetration -- especially in the emerging markets -- increased affordability of PCs from price declines, recurrent PC replacement cycles and rising convergence of PCs with other electronic devices, he added.
"Margin pressures for Asian branded PC vendors could be mitigated by diversification of their operation and demand transition toward higher-margin portables," Chang said.
Component costs will also fall as a result of increasing rivalry between component suppliers and the stronger bargaining power of branded PC vendors with key suppliers and contract manufacturers in view of the enhancement in their market positions and operating scales, he added.