Over the past several years, electronics original design manufacturing (ODM) provider Wistron has expanded the scope of its customers and revenues base to include new customers like Dell, HP and Lenovo.
After its restructuring following its 2001 extraction form its role as the manufacturing arm of Acer, Wistron positioned itself as an ODM company specializing in notebooks and desktop PCs, and other IT-related products.
In recent years, Wistron has branched out to include GPS devices and LCD TVs in its product offerings.
According to analysts at investment bank UBS, the global PC market will continue to suffer from a structural decline. In fact, UBS forecasts another 2 percent decline in PC units for 2014, following the 10 percent decline in 2013, while tablet units could grow 15 percent / 24 percent in 2014E / 2015E.
Wistron Revenue by Region (%)
Wistron is currently working on efforts to improve or lower the ODM’s exposure to its loss-making businesses, something it has been focused on for some time. (Noted below, where NT$ = New Taiwan Dollar)
Wistron Gross Profit Forecasts by Product Segment
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In the contract electronics sector (EMS and ODM) PCs, phones, and tablets provide the majority of revenues and are all facing weaker demand. PCs are declining, tablets are flat, and mobile phones will see moderating growth rates and a shift in the mix, favoring entry-level and mid-range phones says research firm IDC. Below is the firm’s forecast for computers through 2019. (See also: Top 10 EMS & ODM companies by revenues)
Worldwide Computers Segment Revenue Forecast, ($B), 2008-2019
The majority of Wistron’s revenues come from the computing market which could spell trouble if Wistron is unable to create and grow alternate revenue sources. As noted above and below, electronics ODM offering electronics services for the computing sector will do (slightly) better than EMS providers.
Computers 2014 – 2019 CAGR
EMS Sector -1 percent
ODM Sector 0 percent
Total 0%
2014 Market Share
EMS Sector 26 percent
ODM Sector 74 percent
2019 Market Share
EMS Sector 24 percent
ODM Sector 76 percent
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