Compal warns on notebook weakness

A Compal manufactured notebookCompal, which claims to be the second largest contract maker of notebooks worldwide, said it anticipated slower sales of the devices this quarter.

The fourth quarter was traditionally the most bouyant time of the year to sell PCs.

But company president Ray Chen said that falling sales of notebooks will be offset by shipments of smartphones and tablets.

Chen said, according to the Taipei Times, that non PC business will contribute 30 percent of shipments this quarter. Last quarter that figure was 21 percent.

Compal makes tablets for Apple and Amazon, and Chen said smart devices will be the major driving force for revenues next year.  Notebook shipments will flatline.

Margins are already slim for companies like Compal and Wistron who make devices that are often re-branded by multinationals like HP.  Compal’s gross margin in this quarter is only 3.26 percent.