Shipments of non-brand netbooks made in China are expected to reach 2 million to 2.5 million units this year, bringing in 5.5 billion yuan (US$733 million), Taipei-based DRAMeXchange Technology Inc (集邦科技) said in a report on Thursday.
DRAMeXchange’s estimate is higher than Topology Research Institute’s (拓墣產業) forecast of 500,000 units.
While 72 percent of the Chinese white-box netbooks are currently sold domestically, DRAMeXchange believes overseas markets will become the primary sales engine for the sector, so much so that growth in non-brand netbooks is expected to increase two or threefold over the next few years, the report said.
DRAMeXchange analyst Emily Tsai (蔡玉青) said non-brands may never overshadow major global PC brands, but they do threaten Taiwanese second-tier notebook vendors with less international brand recognition.
Chinese non-brand vendors are poised to replace Taiwanese contract PC makers as global brands’ future primary source of manufacturing, Tsai said in the report.
“Because of shrinking margins in white-box mobile handsets, Chinese information technology firms are migrating to the PC industry with help from chip designers VIA Technologies Inc (威盛) and Intel Corp,” Tsai wrote.
Companies such as Longcheers Holdings (龍旗), K-touch (天宇朗通), J&W Technology Ltd (微步) and others are doing so with ease through existing turnkey solutions and IT sales channels, with their eyes on the overseas PC market, Tsai said.
Currently, non-brand netbooks only account for 8 percent of total netbook shipments, but the profit margin on a white-box netbook can be anywhere from 10 percent to 20 percent. For firms with no quality control, the profit margins can easily reach as high as 50 percent, the analyst said.
Hundreds of business entrants have flooded the netbook market in China as a result, but only about 10 can truly be called “real” PC manufacturers with the required technology know-how, supply chain management and stringent product requirements.
Tsai said he expects only a few of the netbook makers to survive in the next few years based on economies of scale, reaching high volume sales of more than 50,000 units per month, while the rest will eventually go out of business.
“The complexity in terms of component supply is much higher for making netbooks than it is for making mobile phones. Good cooperation with CPU, hard drive, panel, main board, battery, casing and other component suppliers is essential and therefore it is extremely difficult to bring down the overall cost of a netbook,” Tsai said.
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