The notebook market saw significant demand for entry-level devices whose pricing levels were comparable to those of tablets in the fourth quarter of 2014, which maintained Taiwan ODMs' overall shipments at a level comparable to that of the previous quarter. But the on-year drop in shipments is a clear indication of the notebook market's persisting woes.
According to Digitimes Research, global notebook shipments will decline by 2.7% in 2014 to 170 million units and shipment totals in 2015 will continue to show a decline. While the business notebook market benefited from the expiration of support by Microsoft for Windows XP early in 2014, this trend will not maintain momentum into 2015.
Taiwan's top handset ODM Foxconn Electronics lost a significant amount of feature phone orders from Microsoft Mobile in the third quarter, while the biggest brand vendor HTC also saw a sharp decline in its shipments. But for others in Taiwan's handset sector, the third quarter was a quarter of growth.
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The global digital still camera (DSC) market continued to decline in the third quarter of 2014, a trend reflected by Taiwan makers' significant on-year shipment drops. Worldwide DSC shipments are expected to drop almost 30% in 2014.
US notebook brand vendors' stronger-than-expected sales fueled their Taiwan-based ODM partners' shipment growth in the third quarter. In general, the enterprise segment saw better shipment momentum than the consumer segment, as Microsoft's termination of support for Windows XP continued to prompt companies to replace their PCs.
HTC's launch of its new smartphone models shot up both its own shipments and the overall shipments from Taiwan's handset sector in the second quarter. Although own-brand shipments were strong, ODM shipments were sluggish.
Taiwan makers saw a rare rise in their DSC shipments in the second quarter of 2014, thanks to strong orders from clients who were launching new models for the spring season. While their shipments stand little chance of returning to levels seen in the pre-smartphone era, drastic drops are neither likely, with small fluctuations expected to be the norm for the DSC sector.
Taiwan's notebook makers saw an unexpected sequential rise in shipments in the second quarter after the end of Microsoft's support for Windows XP generated a wave of replacement demand. Compared to the same period of last year, their shipments still dropped. But in general, the notebook market is improving amid signs that the tablet buzz is subsiding.
Shipment trends clearly show that the DSC market has been severely undermined by smartphones with improving camera functions. Taiwan's DSC shipments may grow sequentially in the second quarter 2014, but compared to the same period of 2013, they will register yet another decline of over 50%.
HTC lost its title as the biggest handset maker in Taiwan to Chi Mei Communication Systems in the first quarter 2014, as the former saw a sharp drop in shipments. But overall shipments from Taiwan's handset sector declined only slightly during the quarter.
Seasonality and high inventories at clients undermined Taiwan notebook makers' first-quarter 2014 shipments, which dropped following three consecutive quarters of sequential growths. Their shipments will decline further in the second quarter, as demand remains weak.
