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Taiwan PC makers search for products

by on17 September 2015


Where did I park that cash cow?

Taiwan's PC makers like Acer and Asus are seeing their industry collapse and there's no clear replacement.

Beancounters at Gartner have added up the numbers, and divided by their shoe size and worked out that in 2015's second quarter, global PC shipments fell 9.5 percent year-on-year to 68.4 million units – sharpest fall in almost two years. Gartner forecasts PC shipments will fall 4.4 percent overall in 2015.

Helen Chiang, associate director of research firm IDC's Taiwan office said the decline was more severe than expected.

But these falling sales are hitting the bottom lines of Taiwanese PC makers hard. Acer reported net losses in 2011, 2012 and 2013 before returning to a slim profitability in 2014.

Now it seems to be in trouble again. Asus is doing better. In the second quarter, its PC shipments fell to 4.3 million units from 4.7 million units the previous year, an annual contraction of 7.7 percent, IDC said.

Asus reported a net profit in the quarter ending June of $145 million, a decrease of four percent year-on-year. Its $3.06 billion rose four percent from a year earlier.

Tracy Tsai, a research director at Gartner in Taipei told Cnet  that declining shipments do not spell the demise of the PC, because that has to stop because there is no alternative to the PC.

In the future, the PC market will be flat and "very replacement driven," she added.

Asus has shifted its focus to mobile devices and accelerating shipments of its low-priced ZenFone range to emerging markets. Asus reckons that its mobile-devices revenue will surpass its core PC business in 2018.

But the handset market is increasingly saturated, Asus is also targeting the connected devices market.

Asus has given its business units "plenty of space to develop cloud services and Internet of Things sort of plans. Meanwhile Acer is trying to reinvent itself as an enterprise software and cloud services provider. In June, Acer announced it would invest $4 million to build a cloud-computing centre in China's massive southwestern municipality of Chongqing, where it has manufactured notebook computers since 2011.

But as a cunning plan it is tricky. Acer is not known for its enterprise solutions and Asus' focus on smartphones may not be sustainable.

Chiang said all of Taiwan's vendors in the post-PC era are in trouble. "It's no problem for them to produce any kind of hardware," she said. "But they still don't have a good understanding of vertical integration and the end user. You need to understand those things to create successful IoT applications.

Last modified on 17 September 2015
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