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Compal seeking comeback to desktop ODM market in 2018
Source: DIGITIMES   Editor: Helan   Update Time :2018/2/5 16:12:31

Taiwan-based Compal Electronics, now the world's No.2 notebook ODM, will stage a comeback to the desktop PC market in 2018 as a contract manufacturer, a move seen to stir the global desktop market that has stayed quiet for a long while.

In explaining the new move, Compal president Ray Chen said that like the notebook space, the desktop market is getting smaller, but its gross margins are not lower than the notebook's. This, coupled with brand vendors showing demand for one-stop shopping, has driven Compal to return to the desktop ODM market, Chen indicated.

Chen disclosed that his company has started to make contacts with existing notebook brand customers including Lenovo, HP, Dell, Acer and Asustek, receiving positive responses from them. He expected Compal to start reaping the fruit of the deployments in the desktop segment in 2019, with annual shipment scale estimated at 1.5-2 million units.

Industry sources said that the desktop market was first impacted by rapid growth of the notebook market in the earlier years and further undermined by the emergence of all-in-one (AIO) PCs later. With the exception for gaming desktops, the entire desktop market has shown slack replacement momentum, relying only on enterprise-use desktop PCs or newly emerging markets to absorb shipments.

As a result, most brand PC vendors have shifted their focus to AIO PCs to better achieve product differentiation and secure higher profit margins, forcing many motherboard makers, who also used to offer desktop system assembly services, to switch to the AIO PC and gaming desktop segments. At the moment, Foxconn and Wistron are the only desktop system assemblers in Taiwan.

The desktop market has remained quiet over the past few years due mainly to a temporary balance between market supply and demand. But the balance will be broken after Compal joins the market, and how the company will do to win patronage from brand vendors remains to be seen, as both Wistron and Foxconn are very strong competitors in desktop pricings and quality, the sources said.

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