TAIPEI, Feb 11 (Reuters) - Asustek Computer said it expects lower shipments of notebook and netbook computers in the current quarter from the fourth quarter on weaker demand in the United States and Europe as the market share of netbooks is squeezed by increasingly popular tablet computers.
The netbook PC pioneer, however, said sales would likely bottom out in the second quarter, with the launch of its Eee PCs and tablets. Asustek is also in discussions with Intel Corp to develop a new generation of netbooks.
Like most of its rivals, Asustek has joined the tablet market with its own model. However, the company said last month it will still stick to its core netbook PC products.
'A big slowdown in netbooks' growth will not arrive very soon. Right now it is the problem in the US, but Europe is stabilizing. The netbook market will still grow this year,' Asustek chief executive Jerry Shen told an investor conference.
The company will start selling its first tablet PC in April, which is expected to contribute 5 percent to total sales in the second quarter, and 10 percent for the rest of the year, according to Shen.
He said Asustek will keep the revenue contribution from tablets at 10-20 percent and still focus on growing netbook and Eee PCs.
The Taiwanese netbook pioneer posted a 29 percent fall in fourth-quarter net profit on Friday to T$4.02 billion ($139 million), down from T$5.66 billion a year earlier but above a consensus forecast of T$3.6 billion.
It said it saw notebook PC shipments in the first quarter at 2.8 million, down from the previous quarter's 3.1 million, while netbook shipments were seen at 1.4 million from the fourth-quarter's 1.5 million.
Brokerage Citi said the aggregated notebook shipments in January for Taiwan's contract makers were down 10 percent compared to the previous month and down 2 percent from a year earlier.
Taiwan's Acer Inc, the world's No.2 PC vendor, said on Thursday its unconsolidated January sales were 34.7 percent lower than the same month a year earlier.
Quanta Computer Inc and Compal Electronics Inc , the world's No.1 and No.2 contract laptop PC makers, also posted a fall of 4.3 percent and 27 percent, respectively, in sales last month.
Full-year net profit was T$16.49 billion, up 32 percent from a year earlier.
'This January shipment number is alarming for the first quarter shipment outlook; it is a clear indication of sharp deceleration of notebook demand,' said Citi analyst Wei Chan in a note.
Asustek shares closed down 6.3 percent before the results. The broad market fell 2.57 percent.
Asustek pioneered the low-cost netbook PC in 2007 but has been rapidly losing market share as bigger rivals such as Acer, global leader Hewlett-Packard Co and Dell Inc entered the netbook sphere.
(Reporting by Clare Jim; Editing by Muralikumar Anantharaman)
((clare.jim@thomsonreuters.com; +886 2 2500 4882; Reuters Messaging: clare.jim.thomsonreuters.com@reuters.net)) Keywords: ASUSTEK/ (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The netbook PC pioneer, however, said sales would likely bottom out in the second quarter, with the launch of its Eee PCs and tablets. Asustek is also in discussions with Intel Corp to develop a new generation of netbooks.
Like most of its rivals, Asustek has joined the tablet market with its own model. However, the company said last month it will still stick to its core netbook PC products.
'A big slowdown in netbooks' growth will not arrive very soon. Right now it is the problem in the US, but Europe is stabilizing. The netbook market will still grow this year,' Asustek chief executive Jerry Shen told an investor conference.
The company will start selling its first tablet PC in April, which is expected to contribute 5 percent to total sales in the second quarter, and 10 percent for the rest of the year, according to Shen.
He said Asustek will keep the revenue contribution from tablets at 10-20 percent and still focus on growing netbook and Eee PCs.
The Taiwanese netbook pioneer posted a 29 percent fall in fourth-quarter net profit on Friday to T$4.02 billion ($139 million), down from T$5.66 billion a year earlier but above a consensus forecast of T$3.6 billion.
It said it saw notebook PC shipments in the first quarter at 2.8 million, down from the previous quarter's 3.1 million, while netbook shipments were seen at 1.4 million from the fourth-quarter's 1.5 million.
Brokerage Citi said the aggregated notebook shipments in January for Taiwan's contract makers were down 10 percent compared to the previous month and down 2 percent from a year earlier.
Taiwan's Acer Inc, the world's No.2 PC vendor, said on Thursday its unconsolidated January sales were 34.7 percent lower than the same month a year earlier.
Quanta Computer Inc and Compal Electronics Inc , the world's No.1 and No.2 contract laptop PC makers, also posted a fall of 4.3 percent and 27 percent, respectively, in sales last month.
Full-year net profit was T$16.49 billion, up 32 percent from a year earlier.
'This January shipment number is alarming for the first quarter shipment outlook; it is a clear indication of sharp deceleration of notebook demand,' said Citi analyst Wei Chan in a note.
Asustek shares closed down 6.3 percent before the results. The broad market fell 2.57 percent.
Asustek pioneered the low-cost netbook PC in 2007 but has been rapidly losing market share as bigger rivals such as Acer, global leader Hewlett-Packard Co and Dell Inc entered the netbook sphere.
(Reporting by Clare Jim; Editing by Muralikumar Anantharaman)
((clare.jim@thomsonreuters.com; +886 2 2500 4882; Reuters Messaging: clare.jim.thomsonreuters.com@reuters.net)) Keywords: ASUSTEK/ (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.