Inventec Corp (英業達), the world’s fourth-largest contract laptop maker, yesterday reported that its third-quarter net profit more than doubled to NT$1.89 billion (US$63.87 million) year-on-year due to greater diversification in its product mix.
The figure reflects a 18.03 percent increase from NT$1.6 billion during the second quarter, the company told an investors’ conference.
Earnings per share during the July-to-September period were NT$0.53, up from NT$0.23 a year ago and NT$0.45 in the previous quarter.
“Knowing the PC market’s structural changes, Inventec is moving to grasp new business opportunities and aims to sustain its business growth through product diversification,” Inventec chief financial officer Yu Chin-pao (游進寶) said.
Currently, Inventec’s major clients include the world’s top three PC vendors — Lenovo Group (聯想), Hewlett-Packard Co and Dell Inc.
Last quarter, shipments of commercial laptops accounted for 60 percent of Inventec’s total laptop shipments, and most orders were placed by HP and Dell, Yu said.
In response to contracting global laptop shipments, Inventec began taking orders for non-notebook products, such as enterprise servers, tablets and smartphones, Yu said.
“Though most non-notebook products are sold with low margins, the mobile device market’s growth potential is considerable, and we have no choice but to adjust our business strategy as soon as possible,” Yu said.
For this quarter, Inventec forecast sales to drop at a single-digit rate from NT$122.46 billion last quarter mainly because of seasonal factors, Yu said.
To sustain profitability, Inventec plans to continue diversifying its product lines and increase its expenditure on research and development of new non-notebook products, including wearable devices, he added.
“Wearable devices, be they smart-watches or smart-glasses, remain peripheral products,” said David Ho (何代水), chief executive officer of Inventec subsidiary Inventec Appliance Corp (英華達).
Inventec Appliance currently supplies smartphones to Chinese smartphone brands including Xiaomi Corp (小米), ZTE Corp (中興), Huawei (華為) and Coolpad (酷派).
Ho declined to say whether Inventec Appliance has begun production of Apple Inc’s iWatch, saying: “It takes time to gauge how popular or profitable wearable products can be.”
“Everyone is making guesses and bets whether wearable electronic devices will become a disruptive innovation in the market, but it’s still too early to give an answer,” Ho said.
“Smartphones will for sure remain Inventec’s sales driver next year,” he added.
For this year, Inventec Appliance aims to ship 30 million mobile devices worldwide, with smartphones accounting for half of that figure, Ho said.
The figure is estimated to grow 33 percent to 40 million units next year, driven by increased orders from new non-Chinese clients, he added.