The leading Taiwanese PC manufacturers are seeing increased orders and more growth than expected in the final quarter of 2013. As a result, Morgan Stanley and Barclays Capital have raised their expectations slightly. Morgan Stanley is now forecasting 4 percent growth to 37.23 million units, according to The China Post, while Barclays is forecasting 5 percent growth to 37.5 million units, according to the Taipei Times. Forecasts had previously been for 1 percent and 2 percent growth respectively.
Excluding Hon Hai (Foxconn), the top five contract manufacturers or ODMs (original design manufacturers) are Quanta, Compal Electronics, Wistron, Inventec and Pegatron. Wistron was spun off from Acer and Pegatron from Asus.
Morgan Stanley pointed to sales of Apple MacBooks helping Quanta, HP orders boosting Inventec, and growing demand for new Asus computers helping Pegatron. Barclays cited a growth in orders for business PCs for US companies such as Hewlett-Packard and Dell.
Barclays said demand was still "soft" as consumers shifted attention to tablets, and it still did not expect Microsoft Windows 8.1 to increase demand. However, the lead author, Kirk Yang, Barclay's head of technology hardware research for Asia excluding Japan, was bullish about China's Lenovo, because it was offsetting weakness in the PC market with growing sales of smartphones and tablets. Yang Yuanqing, Lenovo's CEO, has committed to raising these sales to 50 percent of total revenues.
Lenovo is now the world's third largest smartphone supplier after Samsung and Apple, according to Gartner research.
Today, Taiwan's DigiTimes confirmed that "ODM notebook shipments [were] higher than expected in 4Q13". It added that "ODMs are also optimistic about business prospects for 2014 as the impact of rising tablet sales on notebooks is expected to start tapering off, according to sources from the upstream supply chain."
It remains to be seen whether the death of Windows XP at the beginning of April will have any impact. Unless companies have very old PCs, they should be perfectly capable of running Windows 7 Pro, which is available pre-installed on business PCs as a downgrade to Windows 8 Pro. However, some may find it more economical to replace PCs that, because of their age, will be increasingly expensive to maintain. This would give PC shipments a temporary boost.