Not all local contract notebook manufacturers fare well in their diversification into higher-margin flat-panel televisions, as illustrated by reports that Inventec Electronics Corp (英業達) is phasing out its liquid-crystal-display (LCD) TV division, a story the company has denied.
"Inventec didn't have much of a result in the LCD TV segment, as it failed to attract large orders," Jamie Wang (
The company has been less aggressive in the LCD TV segment when compared with other contract computer makers, as notebooks and servers still account for its major revenues, she said.
In view of the lower profit margins in computer production most local PC makers have moved into LCD TV production in the hope that they can diversify their product portfolios and raise profitability.
Inventec, which first became involved in the flat-screen television market in 2005, is the second local notebook maker to quit LCD TV production -- following Mitac Technology Corp (
The paper said Inventec's digital home division -- consisting of LCD TVs, personal digital assistants (PDAs) and set-top boxes -- only accounted for 1 percent of the company's total sales last year.
Inventec denied the closure, saying in a filing to the Taiwan Stock Exchange that "it is integrating its digital home businesses into a consumer electronics division which has not yet been created."
Meanwhile, Wistron Corp (
The orders from Hewlett-Packard Co and Sharp Corp will increase Wistron's predicted shipments this year to 1 million units, according to the Commercial Times.
Wistron only shipped 100,000 flat-screen TVs last year, having received orders from only two clients -- Dell Inc and Westinghouse Digital Electronics.
"Computer makers are still doing much better by diversifying into PC-related products, handheld products such as PDAs and global positioning systems," Wang said.
The similar nature of the products offers an advantage in that the client base overlaps, but firms moving into the LCD TV arena face challenges such as component integration, technological capability and rising costs, she added.
Both companies reported strong growth in PC shipments last year.
According to a report issued by Credit Suisse yesterday, Inventec is expected to have shipped a total of 7.2 million portable computers last year, a growth of 66 percent from a year earlier, while Wistron's shipments are expected to have grown by 71 percent to 9.9 million units.
Inventec is predicted to ship 2.1 million laptops in the first quarter, up 47 percent from the same period last year, while Wistron's shipments are predicted to drop 7 percent to 2.2 million because of a loss of orders from Dell, the report said.
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