President Ray Chen for Taiwan-based notebook ODM Compal Electronics has led a delegation to Microsoft headquarters in the US in an attempt to compete for OEM orders for Xbox One, according to Taiwan-based supply chain makers.
Microsoft has selected Singapore-based EMS provider Flextronics International and Taiwan-based Foxconn Electronics (Hon Hai Precision Industry) as Xbox One OEMs, with the former to be responsible for 70% of total OEM production and the latter 30%, the sources said. In addition, assembly of games consoles is simpler than that of notebooks, with quotes and cooperative relations with clients being crucial to winning OEM orders, the sources indicated. Therefore, it is very unlikely Compal will obtain Xbox One orders unless Compal offers significantly lower prices, the sources analyzed.
Compal's completion for Xbox One OEM orders signifies that notebook ODMs are seeking non-notebook business opportunities in view of decreasing demand for notebooks, the sources noted. For Compal, the proportion of consolidated revenues for notebooks is expected to slip from 85% in the first quarter of 2013 to 80% in the second, and down further in the third, the sources noted.
Article translated by Adam Hwang
