The world's top notebook PC original design manufacturers (ODM) will endure a bleak first quarter and generally slow first half in 2013, before prospects improve later in the year because of stronger expected sales of Ultrabooks and other ultrathin mobile computers, according to an IHS iSuppli PC Dynamics market brief from information and analytics provider IHS.
Notebook PC shipments from the Top 5 ODMs are forecast to reach some 35.2 million units during the first quarter, down 12 percent from 40.1 million in the fourth quarter of 2012.
All based in Taiwan, the Top 5 notebook ODMs are employed by original equipment manufacturers (OEM), which make use of the ODMs on an outsourced or contract manufacturing basis in order to make computers that are then branded by the OEM to sell to the public. The key strengths of Taiwanese notebook ODMs include low manufacturing cost, flexibility, quick response and high vertical integration-qualities that most major notebook OEMs are keen to leverage in the design and manufacture of their own branded products.
Among OEMs, Hewlett-Packard last year outsourced its notebook PCs to Taiwanese-based ODMs like Quanta Computer, Compal, Wistron, Inventec, Pegatron and Hon Hai. Lenovo did the same, contracting out to Quanta, Compal, Wistron and Pegatron.
Meanwhile, the ODM Quanta had its hands full with orders from computer makers such HP, Lenovo, Dell, Acer, Asus, Toshiba, Apple, Sony and Fujitsu.
The expected decline in shipments for the Top 5 notebook ODMs in the first quarter will be the result of cautiousness among ODM clients. Consumers remain wary as uncertainties linger in the global economy, and a slowing in the markets of Europe, China and the United States has further depressed sales. More importantly, smartphones and tablets have been outselling notebook computers, and Ultrabooks and other ultrathin PCs so far have not taken off as expected.
Within the ODM circle, No. 1 Quanta will suffer more than 10 percent decline in the first quarter, although its perch at the top will not be threatened as the giant manufacturer continues to be the biggest notebook ODM. In comparison, second-place Compal will see a drop of 5 to 10 percent, while No. 3 Wistron will also be down 10 percent on the quarter.
After a shaky start, the notebook ODMs will then start picking up steam as the year unfolds, IHS iSuppli believes. A projected increase in demand for Ultrabooks and other ultrathins will help reignite notebook PC shipments from ODMs to their client OEMs.
Though not performing as expected last year, ultrathins are being given a new lease on life in 2013 in light of new features, including improved battery power, a form factor that lets the display be detached for use as a tablet, a higher-performance central processing unit in the form of Intel's Haswell chip, and the gradual uptake of the recently released Windows 8 operating system.
The ODM market will recover, however, starting in the second half of the year. And at the close of 2013, notebook shipments from ODMs to client OEMs will rise 5 percent from their 2012 level of 156.9 million units, IHS iSuppli estimates.