Worldwidenotebook shipment volume, 2014-2019F (million units)
Notebooks can beclassified as standard notebooks, gaming notebooks, netbooks, convertible2-in-1 notebooks and ultrabooks. As shown in the chart above, the worldwideshipment volume of notebook decreased from approximately 173 million units in2014 to approximately 149 million units in 2016, representing a negative CAGRof approximately 7.2% and is expected to decrease slightly from 2017 onwards,at a negative CAGR of approximately 2.4% till 2019. The trend of decreasing shipmentsof notebooks is primarily caused by the change in customer’s internet surfing habit. The constantly improving performance of smartphones in terms of processing speed, screen display details, battery life,etc., as well as the mobile internet connectivity has driven consumers toincreasingly adopt mobile phones for internet surfing.
Besides, detachabletablets have also driven customers away from low-end notebooks. Substitution betweennotebook, tablet and smart phone is particularly significant from the lower endof the market where consumers only demand a device that can serve their basicneeds of internet surfing.
Despite the overallnegative growth of shipment of notebooks, gaming notebooks and businessnotebooks with higher performances are expected to remain the two fastestgrowing markets. The growing number of gamers has raised the demand for gamingdedicated, high-performance notebooks. Global shipment of gaming notebooks isexpected to increase at a CAGR of over 10.0% between 2017 and 2021. Besidesgaming notebooks, ultrabooks represent another growing segment. The growth ofultrabook shipments has been fuelled by the stably increasing business demandfor notebooks coupled with the consumer’s growing preference for thinner andlighter design of notebooks. It is expected that ultrabooks will maintain aCAGR of over 5.0% between 2017 and 2021.
The CRI Report alsomentions that China and the Asia Pacific region are expected to be a key driverof notebook sales from 2017 onwards.
Internationalnotebook brand owners
According to theCRI Report, the global notebook market is concentrated in the top five
brand owners,accounting for approximately 76.7% and approximately 81.2% of market share in termsof shipment volume in 2015 and 2016 respectively, with an increase ofapproximately 4.5 percentage points. Lenovo and HP were the global best sellersin terms of shipment volume in 2015 and 2016 respectively, with market share ofapproximately 22.2% and 24.2% respectively. In 2015, the top five notebookbrand owners were Lenovo, HP, Dell, Apple and Asus, accounting for approximately22.2%, 20.9%, 13.3%, 10.8% and 9.5% of market share in terms of worldwide shipmentvolume respectively. In 2016, the ranking of top 5 notebook brand ownerschanged to HP, Lenovo, Dell, Asus and Apple, with market share in terms ofglobal shipment volume of 24.2%, 22.1%, 16.1%, 10.1% and 8.7% respectively.
Worldwidetablet shipment volume, 2014-2019F (million units)
Tablets can beclassified as standard tablets and detachable 2-in-1 devices. According to the CRIReport, the global shipment volume of tablets decreased from approximately 251million units in 2014 to approximately 183 million units in 2016, whichrepresents a negative CAGR of approximately 14.6% and is expected to havedownturn from 2017 onwards, at a negative CAGR of approximately 10% till 2019.Of the two types of tablets, standard tablets were the main reason behind thefall of global tablet shipments. Standard tablets, which are those without adedicated keyboard, are losing market shares, given the quickly rising smartphones. However, detachable 2-in-1 devices, those offering a keyboard that canbe completely detached, are seen to have a greater growth potential. Since thistype of tablet keeps the advantage of portability and offers betterfunctionality with a keyboard, major tablet brands, such as Samsung and Lenovo,have started to offer detachable 2-in-1 devices in their product lines.
Internationaltablet brand owners
According to theCRI Report, the global tablet market is concentrated in the top five brands owners,with approximately 49.6% and approximately 50.8% of market share in terms ofthe worldwide shipment volume in 2015 and 2016 respectively. Apple was the bestseller in 2015 and 2016 with over 20% market share in terms of global shipmentvolume for two consecutive years. The top five tablet brand owners in 2015 wereApple, Samsung, Lenovo, Amazon and Asus, with market share in terms ofworldwide shipment volume of approximately 22.3%, 15.3%, 5.6%, 3.3% and 3.3%respectively. The ranking of top five brand owners in 2016 was the same as thatin 2015, with market share in terms of worldwide shipment volume of 22.9%,14.2%, 5.5%, 5.5% and 2.7% respectively.
OVERVIEWOF OEM INDUSTRY
OEMs serve notebookand tablet brand owners by sourcing notebook’s and/or tablet’s components and assembling notebooksand tablets. Reference is made to the CRI Report, Quanta and Compal are the toptwo OEMs for production of notebook in the world, with approximately 50% oftotal global shipment volume in 2016. In terms of global tablet production, HonHai is ranked the top in 2016. Different OEMs serve various notebook and/ortablet brand owners. The table set out below illustrates the major businesspartners of the OEMs:
As shown in theabove table, it is given to understand that notebook and tablet brand owners outsourcetheir production lines to several OEMs in order to minimise the risk of supplyshortages.
To ensure theproduct quality, brand owners require those OEMs to select notebook parts’ and components’ manufacturers from a list of qualified manufacturers.Brand owners conduct regular site visits to those selected manufacturers andreview the human resources, production capacity, product quality and otherproduction-related procedures.