Non-notebook products to drive growth: Compal

FORECAST::President Ray Chen said the firm was able to outperform its rivals last year, but it is counting on smart devices and TVs to offset the drop in laptop sales

By Helen Ku  /  Staff reporter

Fri, Jan 17, 2014 - Page 13

Compal Electronics Inc (仁寶) yesterday said it hopes that by more than doubling its non-notebook product shipments this year it can maintain revenue growth.

Supported by orders from two to three new clients, total smartphone and tablet shipments from the world’s second-largest contract notebook maker, are expected to grow 133 percent to 35 million units this year from 15 million units last year, Compal president Ray Chen (陳瑞聰) told reporters on the sidelines of a corporate event.

TV shipments are forecast to double to 6 million units from 3 million units last year as the company plans to expand capacity through the acquisition of Toshiba Corp’s LCD TV assembly plant in Poland by the end of this quarter, Chen said.

As a result of industry consolidation, laptop shipments are estimated to grow 5 percent this year to about 40.95 million units from 39 million units last year, he added.

“Facing huge pressure from the falling demand for PCs in the global market, Compal was still able to achieve a 5.4 percent growth in laptop shipments last year [from 37 million units the previous year], outperforming its competitors, which reported shipment contractions of up to 20 percent,” Chen said.

“Despite a sluggish forecast for the PC industry, we expect Compal to sustain its laptop shipment growth this year, but the company’s overall business is likely to be driven mainly by non-laptop products such as smartphones, tablets and TVs,” he said.

Smartphones and tablets are expected to account for 10 percent of Compal’s total annual sales this year, up from 9 percent last year, while TV sales are forecast to increase and account for 6 percent of the company’s total full-year revenue, up from a 4 percent share last year.

The increase in shipments of smart devices and TVs are expected to offset the slowing growth of Compal’s laptop shipments. Laptops are estimated to account for 70 percent of the company’s total annual sales this year, down from 83 percent last year, Chen said.

The company will continue improving its operating efficiency and expanding its capacity by integrating resources from subsidiaries, such as handset maker Compal Communications Inc (華寶), to stay competitive, he said.

Subsidiary Compal Communications Inc (華寶通訊) will be integrated into Compal by the end of this quarter.

SinoPac Securities Co (永豐金證券) said in a report on Monday that Compal was able to achieve mild growth in laptop shipments last year because of orders from its major client, Lenovo Group (聯想), which has become the world’s largest PC vendor.

While global laptop shipments are expected to slow this year because of a pick-up in sales of commercial models, 2-in-1 detachable laptops and Chromebooks, SinoPac forecast total laptop shipments would decrease between 15 percent and 20 percent this quarter from last quarter due to seasonal factors.

On an annual basis, laptop shipments are forecast to contract between 3 percent and 9 percent this quarter from a year ago, SinoPac said.