INTERESTING NEWS
Major notebook brands seek to cut costs with different business model
David Tzeng, Taipei; Wen-Yu Lang, DigiTimes.com [Wednesday 20 August 2003]
Advertisement
Intensified price competition has pushed major notebook brands to explore every corner to cut costs, and direct cooperation with component suppliers seems to be the latest strategy, according to sources in Taiwan’s notebook industry.
More than one major brand has recently bypassed its contract manufacturers and ordered components directly from suppliers, sources said. In the past, notebook makers were in general authorized to handle the deals and allowed to profit from them.
According to sources at first-tier notebook makers in Taiwan, major brands have long controlled the profit margins from key components like CPUs, hard disks and panels, but now they are putting their hands on other components, like keyboards, heat sinks, PCBs and cases.
To further bring down price tags, some major brands are even considering replacing notebook makers with EMS (electronics manufacturing service) providers for notebook assembly, sources said.
The moves have reportedly caused serious concern among Taiwanese notebook makers.
Local notebook makers argued that cooperation between major brands and EMS providers had proved unsuccessful in the past.
Major brands, including Dell, shifted all of their orders to Taiwanese notebook makers from EMS providers like SCI Systems (before it was acquired by Sanmina) and Jabil Circuit by around 2001, because the EMS providers were less competitive in systems integration, including material and cost controls and production flexibility, as well as in on-time shipments, local notebook makers said.
Major brands are considering picking up the old business model as they are more desperate to cut prices than before. In addition, notebooks have become a more mature product, which means that production barriers are now lower, sources said.
http://www.digitimes.com/NewsShow/Article1.asp?datePublish=2003/08/20&pages=01&seq=1
Major notebook brands seek to cut costs with different business model
David Tzeng, Taipei; Wen-Yu Lang, DigiTimes.com [Wednesday 20 August 2003]
Advertisement
Intensified price competition has pushed major notebook brands to explore every corner to cut costs, and direct cooperation with component suppliers seems to be the latest strategy, according to sources in Taiwan’s notebook industry.
More than one major brand has recently bypassed its contract manufacturers and ordered components directly from suppliers, sources said. In the past, notebook makers were in general authorized to handle the deals and allowed to profit from them.
According to sources at first-tier notebook makers in Taiwan, major brands have long controlled the profit margins from key components like CPUs, hard disks and panels, but now they are putting their hands on other components, like keyboards, heat sinks, PCBs and cases.
To further bring down price tags, some major brands are even considering replacing notebook makers with EMS (electronics manufacturing service) providers for notebook assembly, sources said.
The moves have reportedly caused serious concern among Taiwanese notebook makers.
Local notebook makers argued that cooperation between major brands and EMS providers had proved unsuccessful in the past.
Major brands, including Dell, shifted all of their orders to Taiwanese notebook makers from EMS providers like SCI Systems (before it was acquired by Sanmina) and Jabil Circuit by around 2001, because the EMS providers were less competitive in systems integration, including material and cost controls and production flexibility, as well as in on-time shipments, local notebook makers said.
Major brands are considering picking up the old business model as they are more desperate to cut prices than before. In addition, notebooks have become a more mature product, which means that production barriers are now lower, sources said.
http://www.digitimes.com/NewsShow/Article1.asp?datePublish=2003/08/20&pages=01&seq=1
