Sat, Jan 18, 2014 - Page 13 News List

Tide turns on notebook sales: Quanta

CLOSING IN?Suppliers of white-label tablets are catching up to Apple and eating into its tablet sales, and most are manufactured by Quanta, the company chairman said

By Helen Ku  /  Staff reporter

Quanta Group chairman Barry Lam stretches his arms out during the company’s year-end party in New Taipei City’s Linkou District yesterday.

Photo: CNA

Quanta Computer Inc (廣達) yesterday said it expects its laptop shipments to grow between 5 percent and 10 percent annually this year, after two years of contraction.

“Despite sluggishness in the global economy, Quanta’s employees helped the company generate decent sales last year, and in the new year, we expect to keep making headway to ensure Quanta’s leadership can be sustained,” Quanta chairman Barry Lam (林百里) told his company’s year-end party.

RISE OF TABLETS

Due to the rise of tablets, Quanta earlier this month reported another fall in laptop shipments for the second consecutive year to 43.1 million units last year, down 19.88 percent from 53.8 million units in 2012.

However, by shipments, Quanta remained the world’s largest contract notebook maker, despite an annual sales decline greater than the industry average of an 11 percent drop.

“Quanta needs to sustain its position in the notebook manufacturing industry this year,” Quanta vice chairman C.C. Leung (梁次震) said yesterday.

“There are ample opportunities to achieve laptop shipment growth of 5 to 10 percent this year, meaning the company can outperform its competitors, while we continue to expand our product portfolio,” Leung added.

Leung said Quanta is focusing not only on achieving notebook shipment growth, but developing new non-notebook products, particularly servers supported by cloud computing technologies, to stay competitive in the market.

To counteract the rise of tablets, Quanta should “innovate twice as fast as in the past,” Leung said.

“Apple Inc and Samsung Electronics Co are both developing ever more innovative products year after year, but suppliers of white-label tablets are catching up and eating into leading tablet vendors’ shipments, and most are manufactured by Quanta,” Leung said.

“With more tablet products sold at cheaper prices, this will hurt not only sales of existing tablet products, but those of notebooks as well,” he added.

JPMorgan analyst William Chen (陳威元) forecast in a report on Jan. 9 that Quanta would post a 17 percent quarter-on-quarter decline in sales this quarter from NT$27.15 billion (US$901 billion) last quarter due to tepid sales momentum of Apple’s MacBook notebooks and tablet products during a product transition period.

NEW DRIVERS

Yuanta Securities Corp (元大證券) analyst Vincent Chen (陳豊丰) said in a client note released on Monday that he expects Quanta’s servers, storage devices and switch hubs to become the company’s new sales and net profits driver this year and next year.

Driven by increasing sales of servers, storage devices and switch hubs, Quanta’s annual sales this year were estimated to grow 6.93 percent to NT$941.15 billion this year from NT$880.38 billion last year.

Net profits were this year estimated to increase 17.75 percent to NT$22.42 billion, an earnings per share of NT$5.82, from last year’s NT$19.04 billion, an earnings per share of NT$4.96, Chen said.

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