Asian computer brands are likely to see their global market shares grow after Dell Inc warned of a challenging fourth quarter this year, British bank Barclays PLC said in a recent report.
Dell, the world’s No. 3 computer maker, reported a weaker-than-expected revenue for the third quarter on Thursday of US$13.72 billion, down 5 percent from the previous quarter, and down 11 percent from a year ago.
The US technology firm now expects its fourth-quarter revenue to grow by as much as 5 percent from the third quarter to US$14.4 billion, which is below the market consensus of US$14.54 billion, but higher than Barclays’ estimate of US$14.33 billion.
Dell said it would see a challenging global and IT spending environment in the fourth quarter of this year and did not expect the scenario to improve much next year.
In view of Dell’s conservative outlook, Barclays analyst Kirk Yang (楊應超) said he believed that Asian PC companies, especially China’s Lenovo Group Ltd (聯想) and Taiwan’s Asustek Computer Inc (華碩電腦), would continue to see their global market shares grow.
“Dell’s conservative expectation on traditional PC-related products also strengthens our view that US companies will gradually shift away from the lower-margin PC business,” he wrote in a report dated on Friday.
Yang said that the operating profit margin at Dell’s consumer division — which accounted for the highest PC product mix in the company — had continued to slip and was pegged at minus 2.7 percent during the third quarter.
On the other hand, margins at Dell’s large enterprise division (7.8 percent), public division (9.2 percent) and small and medium enterprise division (10.6 percent) were significantly higher, even though these units accounted for a smaller PC product mix, he said.
On the supply side, Yang said Dell’s weak third-quarter results and conservative outlook on PCs could negatively affect its major Taiwanese contract notebook suppliers such as Compal Electronics Inc (仁寶電腦) and Wistron Corp (緯創).
Dell shares plunged 7.33 percent on Friday to close at US$8.86 on the NASDAQ, while Lenovo closed up 0.14 percent at HK$7 on the Hong Kong stock exchange.
Asustek shares closed down 0.8 percent at NT$308.5 on the local bourse on Friday. Compal fell 0.81 percent to close at NT$18.35 and Wistron gained 0.36 percent to close at NT$28.25.