Both the notebook-PC and notebook-display markets have been in the doldrums for a while, and that’s unlikely to change. IHS this week reports that eight of the nine leading mobile PC brands reduced their LCD panel purchases in July, causing global market shipments to decline by 23 percent year-over-year.
Worldwide notebook PC liquid crystal display (LCD) panel shipments in July 2013 amounted to 14.9 million units, down from 19.3 million during the same month in 2012, according to the latest edition of the “LCD Panel Supply Chain Tracker-Notebooks” report from IHS Inc., a leading global source of critical information and insight. Shipments in July also were down 18 percent from 18.1 million in June. Top players Acer, Lenovo, HP, Dell and Toshiba all slashed their orders by double-digit percentages in July compared to June, causing the sequential decline in panel shipments.
These panels have the added disadvantage of using LCD technology, which, although popular, has been suffering from oversupply. LCD is still the dominant choice for PCs and most mobile devices, but newer, more power-efficient technologies such as organic light-emitting diode (OLED) are on the rise.
“Notebook brands during the third quarter typically increase their purchases of LCD panels as they prepare to launch new mobile PC models for the second half of the year,” said Ricky Park, senior manager for large-area displays at IHS. “However, many key brands this year have accumulated large panel inventory surpluses because of weak sales in the first half. This has caused them to reduce purchases in July, leading to major declines in notebook PC panel market shipments both on a sequential and an annual basis.”
On a year-over-year basis, eight of the nine leading brands reduced panel orders, with Acer, Asus, Dell, HP, Lenovo, Samsung, Sony and Toshiba all cutting demand compared to July 2012. Among the top tablet panel buyers, only Apple raised its shipments on an annual basis, as it ratcheted up orders to meet MacBook Air demand.
The drop in July panel orders followed a terrible second quarter for the overall mobile PC market.
Worldwide mobile PC shipments in the second quarter shrank a steep 5.1 percent compared to the first three months of the year, based on initial findings. This represented the first time the industry experienced a sequential decline since the second quarter of 2002—way back during the dot-com bust. The mobile PC industry at present is facing tough competition from media tablets, along with a dearth of innovation that would compel consumers to buy new systems.
Several notebook PC brands in July encountered difficulties digesting excess panel stockpiles, with most of the overage consisting of displays for old-model and entry-level notebooks.
Acer posted the biggest decline as its orders in July plunged by 53 percent compared to June. The next biggest drop was at Toshiba, down 43 percent. For its part, Lenovo suffered a 35 percent fall.
Dell and HP’s procurement in July also contracted sequentially given the impact stemming from the end of their fiscal quarters. Dell’s procurement declined 36 percent, while HP’s decreased by 20 percent.
These companies all reduced their purchases on an annual basis as well.
In preparation for the launch of new notebook models, Apple, Asus, Samsung and Sony increased their panel purchases in July compared to June. Apple generated the largest increase, up 76 percent, with 1.8 million units ordered. Apple’s new MacBook Air model launched in July with a 13.3-inch, 2,560 by 1,600-resolution panel.