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Hon Hai Likely to Challenge Quanta, Compal in Mobile PCs, Research Firm Says 2010/07/26: Electronic Manufacturing Service Providers Such as Hon Hai Projected to More Than Double Share of Mobile PC Shipments from 2009 to 2014, According to iSuppli Corp.

Taiwan 's Hon Hai Precision Industry Co., the world's largest electronic manufacturing service ( EMS ) provider, is likely to challenge the dominance of Quanta Computer and Compal Electronics in the mobile PC business, according to U.S. market research firm iSuppli Corp.

The EMS share of mobile PC shipments is projected to more than double from 2009 to 2014, according to a July 13 report from iSuppli.

Mobile PCs, including laptop computers and tablets such as the Apple iPad have been the fastest growing segment of the PC industry in recent years as they have gained the same functionality as desktop PCs and dropped substantially in price. Mobile PC sales exceeded those of desktop PCs for the first time last year.

"Quanta and Compal long have held sway in the mobile PC market, manufacturing nearly all mobile PCs sold by the major computer brands, including Hewlett-Packard Co. and Dell Inc.," said Jeffrey Wu, senior analyst at iSuppli. "However, the continued expansion in the mobile PC market is yielding lucrative growth opportunities that are attracting new competitors to the manufacturing sector, particularly EMS providers."

Despite the recession in 2009, the mobile PC industry demonstrated extremely robust performance relative to many other electronic products, which suffered stagnation or even contraction, iSuppli said in the report. Global mobile PC shipments in 2009 rose 19.6 percent to 166.9 million units, and shipments will more than double by 2014, reaching 371.5 million units, according to iSuppli.

In the second quarter this year, Quanta, the world's largest maker of mobile PCs, had a 70 percent surge in sales revenue from the same period a year ago to NT$289.7 billion (US$9 billion). Compal, the world's second-ranked mobile PC maker, saw its second-quarter revenue soar by 78 percent to NT$217 billion. Sales figures are based on monthly reports the companies provide to the Taiwan stock exchange authorities.

Hon Hai — which makes electronic gadgets for Apple, Sony, Hewlett-Packard and Dell — had second-quarter sales of NT$514.5 billion, dwarfing the revenue of Quanta and Compal, yet with 64 percent growth that lagged the two mobile PC makers.

Taiwan has the world's largest electronics contract manufacturing industry, including hundreds of companies such as Hon Hai, Quanta, Compal and Wistron Corp., a spin-off from Acer Inc. Acer became the world's second-largest PC maker after exiting contract manufacturing nearly a decade ago and focusing on marketing and brand building.

The Taiwan government has made brand building a key objective to boost the competitiveness of the local economy.

EMS companies will experience a rapid rise in mobile PC volume, with their share of worldwide shipments rising to 8.6 percent, up from a mere 3.4 percent in 2009, iSuppli said.

Leading EMS provider Hon Hai has served smaller competitors in the mobile PC manufacturing industry such as Apple and Sony. In 2008, Hon Hai decided to expand its presence in the already crowded business by expanding its R&D team, according to iSuppli.

Hon Hai Precision Industry Co.

http://www.foxconn.com/

Quanta Computer

http://www.quantatw.com/Quanta/english/Default.aspx

Compal Electronics

http://www.compal.com/index_En.htm

Wistron Corp.

http://www.wistron.com/

Acer Inc.

http://www.acer.com/worldwide/selection.html

Please visit www.taiwantrade.org.tw or www.brandingtaiwan.org for more information.

Taiwan External Trade Development Council (TAITRA)

The Taiwan External Trade Development Council (TAITRA) was founded in 1970 to promote Taiwan 's foreign trade and competitiveness in world markets. Over the past 3 8 years, TAITRA has played a key role in the development of the Taiwan economy. TAITRA is jointly sponsored by the government and commercial associations and is viewed by all as the business gateway to Taiwan for the international business community.

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