Taiwanese Manufacturers' Share of Global Desktop PC Shipments Continues to Grow, According to MIC

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November 20, 2009

According to research of the Taipei-based Market Intelligence & Consulting Institute (MIC) conducted as part of the ITIS project, the peak-season effect for worldwide desktop PC shipments in the third quarter of 2009 was not as evident as in previous years, and demand weakened considerably. Looking at overall PC shipments, consumer demand for PCs still exists, but this demand is rapidly migrating towards notebook PCs, particularly in Western Europe, North America and Japan. Currently, emerging markets such as China and other countries in the Asia-Pacific region still feature significant demand for desktop PCs. Therefore, worldwide desktop PC shipment trends are moving closer to developments in these emerging markets.

The back-to-school demand in Western Europe and North America and summer holiday promotions in China were two key shipment factors in the third quarter of 2009. In the third quarter, affected by the DTR (Desktop Replacement) effect, the back-to-school demand for desktop PCs in Western Europe and North America weakened and some demand was even postponed until after schools started, indicating consumers have been taking a conservative stance towards spending. In China, summer promotions did not live up to expectations. Only after inventories were depleted would channel distributors and brand-name vendors require new shipments to replenish inventories. Consequently, global desktop PC shipment did not experience a strong peak-season effect in the third quarter.

Shipment volume of the Taiwanese desktop PC industry in the third quarter of 2009 is estimated at 11.80 million units, growing 13.6% sequentially but declining 1.9% year-on-year. According to MIC Industry Analyst Vincent Chang, "due to relatively sluggish end-market demand, many distribution channels and brand-name vendors were passive towards the placement of orders with Taiwanese makers. Nevertheless, Windows 7 was launched in late October and brand-name vendors and channel distributors began converting their PC systems to Windows 7 in September 2009, driving up shipments of related products. Most desktop PC models launched in the third quarter were AIO (All-In-One) models, which mainly featured full-system shipments. Some brand-name vendors' procurement strategies thus increased the assembly level to full-system, reducing their in-house system production rate. Consequently, Taiwanese makers' system shipment share in global desktop PC shipments continued to increase, and the shipment rankings started to be affected."

As for the fourth quarter of 2009, it is anticipated that global desktop PC shipment volume will decline due to several factors. First, the DTR effect continues to accelerate in North America and Western Europe. Second, the fourth quarter is not a peak season in emerging markets. Third, commercial markets have scaled down IT spending in 2009, and procurements aimed at using up budgets are unlikely to occur. Therefore, global desktop PC shipment volume is anticipated to decline in the fourth quarter of 2009. Benefiting from major brand-name vendors' continued reduction of in-house production, as well as demand for AIO PCs, Taiwanese makers' share of global shipments is expected to continue to grow.

Currently, many companies either with notebook PC or monitor manufacturing technology have made aggressive forays into the AIO PC segment. In 2010, the entrance of these two types of companies in the AIO PC segment, however, is expected to alter the competitive landscape in the industry, affecting traditional desktop PC makers. This is expected to lead to a new round of reshuffling in desktop PC makers' shipment rankings.

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About MIC

Market Intelligence & Consulting Institute (MIC), based in Taipei, Taiwan, was founded in 1987. MIC is Taiwan's premier IT industry research and consulting firm providing intelligence, in-depth analysis, and strategic consulting services on global IT product and technology trends, focusing on markets and industries in Asia-Pacific. MIC is part of the Institute for Information Industry.

http://mic.iii.org.tw/english

About ITIS

The Industry and Technology Intelligence Services (ITIS) project is managed by the Department of Industrial Technology of Taiwan's Ministry of Economic Affairs. As part of the project, research is conducted in a variety of fields, including the ICT sector. The project serves both the public and private sector.

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