Notebook ODMs have recently started integrating their R&D resources from different departments and are using their idle capacity to develop tablets, smartphones or wearable devices, according to sources from the upstream supply chain.
Since the ODMs are seeing their notebook orders drop, to cut costs, they are integrating R&D resources such as chassis or EMI design from their teams that serve different clients.
Since most ODMs have already finished their manufacturing equipment amortization, they only have small costs from the manufacturing segment with the majority of costs coming from R&D.
In the past, the ODMs used to establish specific teams to handle each client, and each team had its own development resources, but without sufficient orders, the ODMs will need to start integrating the overlapping investments to reduce their costs.
For 2014, Hewlett-Packard's (HP) notebook orders were mainly outsourced to Quanta Computer and Inventec, while Dell's orders were given to Compal Electronics and Wistron. Lenovo has taken some of its orders back to give to its joint venture with Compal and has outsourced the remaining to Compal and Wistron.
Acer still has not yet finished its request for quotation (RFQ) process for 2014, but market watchers expect the company's orders to still be landed mainly by Compal and Wistron. Apple and Sony's notebook orders for 2014 will be mainly outsourced to Quanta.
