Makers buoy up desktop PCs via small and compact designs amid the rising popularity of portable rivals.
Suppliers of desktop PCs in China continue to strengthen the line by boosting production of mini and all-in-one or AIO configurations while keeping traditional types in their selections. Many project the first two will further increase their shares of the country’s total output
Companies are rolling out compact form factors to ride the miniaturization trend and compete with portable variants such as laptops, tablet computers and netbooks. They also monitor growing demand for small designs within the line itself in the last two years, thanks to falling prices. Six years ago, quotes were at least 50 percent more expensive than bulkier versions.
AIO kinds represented more than half of Shenzhen Hasee Computer Co. Ltd’s desktop PC yield in 2010. The ratio is expected to climb by another 10 percent this year. To broaden the selection, the maker will emphasize mini units based on custom specifications.
Hedy Computer Co. Ltd, meanwhile, began developing all-in-one varieties in 2010 to take advantage of the type’s enhanced performance-to-price ratio. The units are now priced 10 to 15 percent lower than mini variants. The last accounted for 60 percent of the supplier’s 100,000-unit monthly production last year. In the months ahead, AIO’s share of Hedy’s output will increase to 15 percent from 10 percent the previous period.
In addition, manufacturers are enhancing their products to bolster competitiveness further.
Shenzhen Hasee is introducing more environment-friendly models this year. Its all-in-one computers will use ABS for the frames instead of the traditional SECC. The company will also develop larger versions in the 21.5 to 23.6in range.
Hedy will focus on improving the appearance of its desktop units by working with Taiwan’s Micro-Star and Giga-byte. Its 2011 releases will consist mostly of 18.5 to 21.5in models.
Shenzhen Quadsine Technology Co. Ltd will launch more 15.6 to 21.5in versions when it enters into a cooperation agreement with Intel and AMD this year. It has an existing tie-up with Via as the latter’s designated dealer of desktop CPUs in mainland China.
Besides product-driven efforts to boost sales, makers are increasing presence locally and in Asia. They are eyeing the mainland’s sizable PC market. In 2010, it absorbed 19 and 60 percent of the global and the Asia-Pacific region shipments, according to Gartner. The latter’s volume share is estimated at 114.6 million units, of which 61.4 million are desktop variants. Demand for the last was largely driven by the mainland, which has been boosting domestic consumption by bringing computers and other electronics products to the countryside. Seventy to 80 percent of PCs shipped to the country in 2010 were tabletop models.
The trend is expected to carry over in the next few years, thanks to stable orders from the government and education sectors. It is for this reason that large enterprises such as Founder, Shenzhen Hasee and Hedy will continue to target own-brand promotion at the local market. OBM orders comprise about 90 percent of these key players’ output. The last two companies exported only 30 and 20 percent of yield in 2010, although Hedy projects a slight increase in coming months. Manufacturers allocate no more than 50 percent of their yield for their overseas business. They ship mainly to OEM clients.
At present, there are 100 suppliers in the line. The number is expected to remain steady, owed to recovering demand and as the category keeps up with trends and builds a niche. In 2009, the maker pool shrank by 20 percent, when many operations shifted to the more lucrative tablet PCs or netbooks. Others quit the segment altogether.
Suppliers can provide traditional, mini and AIO variants. Large companies such as Shenzhen Hasee and Hedy offer all three, but small and midsize makers concentrate on one or two types and have no plans to broaden selections this year. Shenzhen Quadsine focuses on all-in-one units.
China’s desktop computer selection caters to specific requirements. Traditional variants are now mostly marketed in the DIY sector, which targets game players and production designers who prefer to configure hardware according to their needs. Mini kinds, meanwhile, are widely adopted in government offices and businesses, and AIO varieties in home setups.
Regardless of form factor, differentiation lies in the components used.
Entry-level models typically adopt a Via Nano CPU and Chrome9 HCM-3D graphics card. These have 1GB DDR2 memory and 160GB HDD. The majority has a multicard slot.
Midrange versions use Intel Atom, Pentium or Celeron or AMD Athlon II processors, and integrated or discrete graphics card. They incorporate 2GB DDR3 memory and at least 320GB hard drive.
High-end variants run mainly on Intel Core i2, 3, 5 or 7 or AMD Phenom II CPUs. A discrete graphics card, 4GB DDR3 memory and at least 500GB HDD are also onboard. The units come with a DVD-RW drive and a multicard slot. These support 10/100Mbps Ethernet LAN connectivity.
LED-backlit displays are now mainstream, but in mini types these are offered as an option. The choices are 15.6 or 17.3in monitors for low-end units, and 18.5, 21.5in and larger for upscale variants.
The major components and materials for desktop PCs are the processor, motherboard, hard drive, LCD panel and case. Most suppliers outsource them. Only a few are capable of producing the second and the last in-house.
For CPUs, China makers turn mainly to Intel, AMD and Via, with those from the first two usually tapped for midrange and high-end models. They obtain HDDs mostly from Hitachi, Western Digital and Samsung, while display panels are from the last, LG Display, AUO, Innolux, Chimei and HannStar.
ABS and SECC are used for cases, with the former expected to be widely adopted this year. Besides costs that are 10 to 15 percent lower, the plastic material requires no chromate coating and is therefore “green” unlike its steel counterpart.
Desktop PC suppliers in Taiwan are leveraging the product’s strong multimedia feature to expand reach in the high-end home entertainment and gaming segments. They continue to offer traditional, all-in-one or AIO and mini types, but believe the second as promising, especially in the upscale market. As a result, makers have introduced such models with 3D and gaming functionality.
At present, the available display sizes of AIO variants are 15.6, 16, 19, 20, 22, 24 and 26in, with 22in as the mainstream. High-end varieties adopt 23.6 or 24in LCDs.An example is Micro-Star Intl Co. Ltd’s Wind Top AE2420 3D model, which enables 3D viewing experience through 120Hz technology and the use of active shutter glasses. It integrates an ATI 3D graphics card and supports full high-definition 1080p. The version comes with a Blu-ray/DVD drive and USB 3.0 connection.
The ET2400XVT model from AsusTek Computer Inc. has a 23.6in 120Hz 3D panel and multitouch screen. An Nvidia 3D graphics card is onboard. The AIO PC comes with an Eee wireless keyboard and a tray-in Blu-ray ROM drive.
Besides 3D graphics, high-end computers feature theater-quality audio, including THX and SRS.
To support these functions, desktop computers launched by Taiwan makers last year used Intel 32nm processors, including the i3, i5 and i7 versions that support DDR3 memory. The last two Core i CPUs are mostly employed in high-end PCs.
Tower types such as Micro-Star’s Drakon Advent model designed for the hard-core gaming market run on Intel Core i7 processors. The unit has an Intel P55 Express Chipset and an upscale graphics card. It boasts THX-certified 7.1-channel audio output, a Blu-ray drive, and USB 3.0 and HDMI 1.4 connection. A CPU water-cooling module is included for enhanced system stability.
In contrast, entry-level models support Intel Atom CPUs. These, however, have a small form factor and low power consumption.
For 2011 product releases, suppliers in the island plan to adopt Intel’s new Sandy Bridge platform.
Taiwan companies remain optimistic about the desktop PC segment as worldwide shipment volume continues to rise, albeit at a slow rate. The figure is projected to reach 120.2 million units this year and 122.2 million in 2012, posting respective growth of 1.2 and 1.7 percent, according to Market Intelligence & Consulting Institute. Last year’s estimated total is 118.8 million units, which is 0.4 percent higher than in 2009. The major destinations are the Asia-Pacific region and the US.
AsusTek Computer Inc.
First International Computer Inc.
Hedy Computer Co. Ltd
Micro-Star Intl Co. Ltd
Model: Wind Top AE2420 3D
Shenzhen Hasee Computer Co. Ltd
Shenzhen Quadsine Technology Co. Ltd
Model: X50V2 Plus
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All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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