Quanta to speed up PC-to-tablet transformation

By Helen Ku  /  Staff reporter

Tue, Jun 25, 2013 - Page 14

Quanta Computer Inc (廣達), the world’s top contract laptop maker, yesterday said it would speed up efforts to manufacture more non-notebook products, amid weaker notebook shipments and stronger competition in the tablet sector.

The company hopes that its non-notebook business will account for more than 50 percent of its total shipments in three to five years, chairman Barry Lam (林百里) said at the company’s annual general meeting.

“Quanta has been trying hard to transform its business in response to changes in the PC industries,” Lam told shareholders. “Quanta will continue developing cloud-based products and new technologies to reflect PC market trends.”

At the meeting, Quanta vice chairman CC Leung (梁次震) forecast that the company’s shipments — including notebooks, tablets and data center servers — will grow through the year.

Leung said the average gross margin of Quanta’s tablet products is higher than that of notebooks, but because the average selling price of tablets is lower than notebooks’, the gross margin of a tablet is still smaller than a notebook’s.

Leung made the remark to emphasize that Quanta can reap big profits in the second half.

“We expect Microsoft Corp’s upgraded Windows 8.1 operating system to boost demand for notebooks later this year if prices of touch-enabled PC products can be lowered further,” he added.

Leung said traditional PCs remain indispensable, with more complete specification and stronger processing power able to meet users’ need, adding that touch-enabled laptop or desktop computers are likely to take away market share from tablets and secure contract PC makers’ profitability.

Shareholders yesterday approved Quanta’s proposal to distribute NT$4 in cash dividends per share based on last year’s earnings of NT$23 billion (US$762.47 million), or NT$6.01 per share. That means a dividend payout ratio of 66.6 percent and a dividend yield of 6.58 percent on yesterday’s closing share price of NT$60.8.