Worst time has passed, notebooks expected to recover

With the economy warming up, Intel launching low-cost solutions, and a wave of notebook (NB) replacement demand about to begin, the market expects the worst time for the notebook industry has passed, and this year could see the return of spring swallows.

As the year-end banquet season for notebook makers kicks off, Compal, leading the way on the 16th, was first to launch the "year-end banquet rally," hitting the daily limit up to 23.95 yuan during trading, driving Quanta, Inventec, Pegatron and Wistron to rise on both price and volume.

With Intel launching low-cost solutions and demand emerging in both consumer and commercial markets, according to a DIGITIMES Research survey, as commercial and consumer demand warmed up, global NB shipments in the fourth quarter of 2013 grew 4.1% against the trend compared with the previous quarter, the decline for 2013 narrowed to 10.6%, and the year-on-year decline was also better than expected.

Notebook contract manufacturers and related component makers alike have sensed signs of recovering demand in the notebook industry. As the international economy recovers, many industry players optimistically expect the notebook market to bottom out and rebound this year. Coupled with the gradual results of major manufacturers' active transformation in recent years, component makers are not pessimistic about 2014.

Compal has internally set a goal this year of doubling shipments for its three major product lines: tablets, phones and TVs. Moreover, Apple's iPad Mini will begin small-volume shipments from the second quarter, returning operations to optimism and firing the first shot for the year-end banquet rally. This week, Quanta will hold its year-end banquet on the 17th and Pegatron on the 19th, when optimistic outlooks are expected to be released, bringing new momentum to share prices.

The chairman of Pegatron said recently at an event held by the Taipei Computer Association that last December some shipments of the group's affiliates were deferred to January this year, leaving employees extremely busy with no time to rehearse for the year-end banquet performance. This year, Tung Tzu-hsien will focus on improving operating efficiency, internal fundamentals and customer service.

In addition to the recovery of the notebook industry, the market is bullish on the considerable growth potential of the cloud market, which is expected to bring new growth momentum to major notebook manufacturers. The Institute for Information Industry's Market Intelligence & Consulting Institute (MIC) estimates that the cloud business opportunity will grow to 42 billion US dollars in 2014, with a compound annual growth rate of 27.7% since 2009.