WorldWide Tech & Science. Francisco De Jesús.
Hewlett-Packard (HP) has sent RFQ (request for quotation) notices to potential makers for its notebooks to be launched in 2012 and is negotiating orders, with main placement of orders to be shifted from EMS providers to ODMs, according to Taiwan-based notebook supply chain makers.
In 2010, HP began to place many orders with EMS providers, including Taiwan-based Foxconn (Hon Hai Precision Industry) and Singapore-based Flextronics International, to increase competition to minimize production cost, resulting in cutting ODM's quotes and orders, the sources indicated.
However, EMS providers have appeared to be inferior to ODMs in terms of product quality and punctual delivery so far from 2010, the sources pointed out.
While EMS providers have the advantages of lower mass production cost of a single model as well as lower production costs of molds and components, notebook production requires high capabilities in system integration, the sources analyzed. ODMs with 20 years of experience are superior to EMS providers in system integration, the sources indicated.
Some ODMs declined HP orders in 2010 and 2011 because HP asked for too low prices, the sources indicated. For 2012 orders, many ODMs think that the prices asked for by HP are basically acceptable, the sources pointed out.
HP is expected to ship 47-50 million notebooks in 2012 and Taiwan-based ODMs Quanta Computer, Compal Electronics, Inventec and Wistron are likely to obtain orders.