Tablet computers and smartphones are eating notebooks' lunch in more ways than one. It looks as if component makers may have to choose between meeting demand in the high-flying tablet and smartphone markets, or in the more staid notebook market.
Last week, EBN contributing editors Marc Hermann and Jennifer Baljko reported on supply concerns expressed at the Mobile World Congress gathering. (See: MWC: Mobile’s Next Leap and MWC: Debates on Mobile Devices Give Way to Supply Issues.) Also last week, Asian trade publication DigiTimes ran this little tidbit: “Supplies of notebook components, including CMOS image sensors, chassis, batteries, and LED chips, are likely to suffer shortages as capacities at component suppliers are also occupied by orders for similar products from the smartphone and tablet PC sectors, according to industry sources.”
It's not surprising that consumer demand for the newer devices is siphoning components toward those markets. What is surprising is that it seems suppliers are facing an either/or conundrum: Do they meet notebook orders, or smartphone/tablet orders? And if that is the case, where does that leave all the talk — much of it on these pages — about long-term relationships, partnerships, visibility, and better forecasting?
In some, maybe most, cases, notebook makers also have skin in the tablet/smartphone game. So if supplies are diverted internally, it may not be visible to the end customer. It's the companies that specialize in notebooks — such as Acer, Lenovo, and Quanta — that may be waiting in line.
The real question for suppliers, then, is not which market to choose, but which company placed the orders first and how valuable the relationship is. When component supplies get tight, everyone in the supply chain has to make choices, and not all of them are easy.
It wasn't that long ago that companies were cancelling orders just to stay afloat. How these companies worked with their suppliers then may have an impact on the decisions suppliers make in the near future.