Global notebook industry
Worldwide notebook shipment volume, 2014-2019F (million units)
Notebooks can be classified as standard notebooks, gaming notebooks, netbooks, convertible 2-in-1 notebooks and ultrabooks. As shown in the chart above, the worldwide shipment volume of notebook decreased from approximately 173 million units in 2014 to approximately 149 million units in 2016, representing a negative CAGR of 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 shipments of notebooks is primarily caused by the change in customer’s internet surfing habit. The constantly improving performance of smart phones in terms of processing speed, screen display details, battery life, etc., as well as the mobile internet connectivity has driven consumers to increasingly adopt mobile phones for internet surfing.
Besides, detachable tablets have also driven customers away from low-end notebooks. Substitution to notebook, tablet and smart phone is particularly significant from the lower end of the market where consumers only demand a device that can serve their basic needs of internet surfing.
Despite the overall negative growth of shipment of notebooks, gaming notebooks and business notebooks with higher performances are expected to remain the two fastest growing markets. The growing number of gamers has raised the demand for gaming dedicated and high-performance notebooks. Global shipment of gaming notebooks is expected to increase at a CAGR of over 10.0% between 2017 and 2021. Besides gaming notebooks, ultrabooks represent another growing segment. The growth of ultrabook shipments has been fueled by the stably increasing business demand for notebooks coupled with the consumer’s growing preference for thinner and lighter design of notebooks. It is expected that ultrabooks will maintain a CAGR of over 5.0% between 2017 and 2021.
The CRI Report also mentions that China and the Asia Pacific region are expected to be a key driver of notebook sales from 2017 onwards.
International notebook brand owners
According to CRI, the global notebook market was concentrated in the top five brand owners, accounting for approximately 76.7% and approximately 81.2% of market share in terms of shipment volume in 2015 and 2016 respectively, with an increase of approximately 4.5 percentage points. Lenovo and HP were the global best sellers in terms of shipment volume in 2015 and 2016 respectively, with market share of approximately 22.2% and 24.2% respectively. In 2015, the top five notebook brand owners were Lenovo, HP, Dell, Apple and Asus, accounting for approximately 22.2%, 20.9%, 13.3%, 10.8% and 9.5% of market share in terms of worldwide shipment volume respectively. In 2016, the ranking of top 5 notebook brand owners changed to HP, Lenovo, Dell, Asus and Apple, with market share in terms of global shipment volume of 24.2%, 22.1%, 16.1%, 10.1% and 8.7% respectively.
Global tablet industry
Worldwide tablet shipment volume, 2014-2019F (million units)
Tablets can be classified as standard tablets and detachable 2-in-1 devices. According to CRI, the global shipment volume of tablets decreased from approximately 251 million units in 2014 to approximately 183 million units in 2016, which represents a negative CAGR of approximately 14.6% and is expected to have downturn 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 the fall of global tablet shipments. Standard tablets, which are those without a dedicated keyboard, are losing market shares, given the quickly rising smart phones. However, detachable 2-in-1 devices, those offering a keyboard that can be completely detached, are seen to have a greater growth potential. Since this type of tablet keeps the advantage of portability and offers better functionality with a keyboard, major tablet brands, such as Samsung and Lenovo, have started to offer detachable 2-in-1 devices in their product lines.
International tablet brand owners
According to CRI, 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 of the worldwide shipment volume in 2015 and 2016 respectively. Apple was the best seller in 2015 and 2016 with over 20% market share in terms of global shipment volume for two consecutive years. The top five tablet brand owners in 2015 were Apple, Samsung, Lenovo, Amazon and Asus, with market share in terms of worldwide 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 that in 2015, with market share in terms of worldwide shipment volume of 22.9%, 14.2%, 5.5%, 5.5% and 2.7% respectively.
OVERVIEW OF OEM INDUSTRY
OEMs serve notebook and tablet brand owners by sourcing notebook’s and/or tablet’s components and assembling notebooks and tablets. Reference is made to the CRI Report, Quanta and Compal are the top two OEMs for production of notebook in the world, with approximately 50% of total global shipment volume in 2016. In terms of global tablet production, Hon Hai ranked top in 2016. Different OEMs serve various notebook and/or tablet brand owners. The table set out below illustrates the major business partners of the OEMs:
As shown in the above table, it is given to understand that notebook and tablet brand owners outsource their production lines to several OEMs in order to minimize the risk of supply shortages.
To ensure the product 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 and review the human resources, production capacity, product quality and other production-related procedures.