Wed, Aug 12, 2015 - Page 13 News List

Asustek expects smartphone growth

WINTEL:CEO Jerry Shen said the launch of Microsoft’s Windows 10 was unlikely to affect demand, while Intel’s Skylake processor will not be available until next month

By Lauly Li  /  Staff reporter

Asustek Computer Inc (華碩) yesterday said it expects its notebook computer shipments to grow mildly this quarter from last quarter, and predicted better smartphone business in the second half of this year.

The PC maker made the comments after releasing its second-quarter financial results, which beat analysts’ forecasts, at a time when the company is working to improve its profit margins against market headwinds.

“This quarter’s notebook shipments will grow from last quarter, mainly due to the lower shipment base in the last quarter, but not because of market demand,” Asustek CEO Jerry Shen (沈振來) told a media briefing after an investors’ conference in Taipei.

Shen said the launch of Microsoft Corp’s Windows 10 is not expected to benefit PC vendors’ shipment performance for the time being, as the US company is offering a free upgrade to current users.

In addition, Intel Corp’s new processor architecture, Skylake, will not be available until next month, which will drag on consumer notebook sales, he said.

“We are carefully controlling our notebook shipments at the moment, as many of the models are running on older processors,” Shen said, adding that he expects Asustek and other PC makers to face a severe shortage of Skylake processors next month.

Noting that last quarter was Asustek’s trough of the year in the PC segment, Shen said the company expects notebook computer shipments this quarter to grow 12 percent to 4.8 million units from 4.3 million units last quarter.

Last quarter’s notebook shipments were lower than Asustek’s original forecast of 4.5 million units, causing the company to lower its annual notebook shipment target last month from a previous estimate of 22.8 million units to 20 million units this year.

However, Asustek’s 5 million smartphone shipments last quarter beat its forecast of 4.8 million units, Shen said, adding that the company expects shipments to increase by 20 percent to 6 million this quarter.

“We remain optimistic about Asustek’s smartphone business,” Shen said, citing growing demand in emerging markets such as India, Indonesia and China.

In addition, Asustek is working with Hon Hai Precision Industry Co (鴻海精密) to manufacture handsets in India and Brazil, Shen said.

“We will start to ship handsets from India at the end of this month,” he said, adding that Hon Hai began to manufacture Asustek’s ZenFone in Brazil at the end of the first quarter.

In the second quarter, Asustek’s net profit declined 3 percent to NT$4.65 billion (US$144.95 million), or NT$6.27 per share, a 27 percent rise from NT$3.68 billion in the first quarter.

Last quarter’s earnings beat HSBC Securities Taiwan Corp’s estimate of NT$4.23 billion by 9.92 percent.

Asustek shares dropped by 1.76 percent to NT$250.5 in Taipei trading yesterday, underperforming the TAIEX, which lost 0.86 percent.

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