2010 notebook shipment is expected to grow 27.3% YoY to 203M units given the 1.) Optimistic replacement effect and 2.) Anticipated corporate demand takes off in 2H10. We see strong commercial OEM makers such as HP, Dell and Lenovo have re-gained their momentum in commercial models while consumer-oriented brand such as Acer and Asus dedicate in their commercial models leveraging with their strength in consumer models.
Aggressive pricing strategy has forced OEM to adopt order consolidation that shares for top 4 ODM markers has been accelerated from 75% and likely reached more than 80% in 2010. Quanta and Compal, with the 50~53M units and 48~50M units respectively, will take over 50% shares accumulatively. Meanwhile, we see more margin pressure will come out not only for OEMs but also for ODMs given the less product differentiation and fierce competition.
Raising component cost and threat from EMS have forced NB-ODM to accelerate the component integration progress at the purpose of effective cost control and supply enhancement. Not only the material cost, labor cost has been highlight during past months attributed by government policy and FIH issue. Raising salary and component expense will cause the pressure to both OEMs and ODMs.
