PALO ALTO, CA – Current market dynamics point to further outsourcing by OEMs, and as a result, both EMS providers and ODMs will enjoy steady growth during the forecast period, says Frost & Sullivan.
Compared to the EMS market, ODMs have witnessed higher growth over the last five years, the research firm states.
In a study released today, the research firm finds that the global EMS market earned revenues of $190 billion in 2006 and will grow to $387.4 billion in 2013. The global ODM market earned revenues of $100.7 billion in 2006 and is on track to reach $219 billion in 2013.
“Increased outsourcing from automotive and communication industries along with new outsourcing opportunities from the aerospace and defense, medical and industrial applications industries will likely drive the future growth of the EMS market,” notes Frost research analyst Lavanya Ram Mohan.
Design expertise represents a primary growth factor for ODMs, especially in markets such as consumer electronics, computing, PC and servers, says the researcher.
Frost adds that OEMs often seek ODMs as strategic design partners; ODMs’ ability to offer design solutions with high quality and low-cost options will maintain the market’s high growth rate during the forecast period.
However, ASPs in traditional markets have declined, and EMS providers often find themselves squeezed to provide the lowest cost. EMS providers can no longer remain complacent based on their manufacturing, engineering, design, or supply chain expertise, the company continues.
EMS providers need to offer differentiated services to OEMs, while simultaneously retaining the current level of services. In particular, EMS providers offering design services can increase revenues and profits substantially, says Frost. EMS providers will likely benefit from the considerable growth potential within supply chain-related operations.
SAN FRANCISCO – The combination of accelerating PC unit growth, benign end-market PC pricing and falling component costs is creating a favorable operating environment for PC vendors, says Deutsche Bank Equity Research.  
Recent IDC market data show worldwide PC shipment growth accelerated to 12.5% year-over-year in the second quarter, up 1.5 points sequentially.
DB believes PC unit growth will accelerate through the second half, and unit growth estimates will trend up as a result of continued strength in emerging markets, ongoing consumer strength and early signs of a corporate upgrade cycle. 
In addition, stable PC pricing and declining component costs – DRAM, aggressive near-term hard disk drive pricing and excess CPU inventory – will translate into improving profitability for the sector, says the firm.
IDC data show that worldwide PC shipment growth on the rise, buffeted by continued robust demand in the Asia Pacific (up 20% over last year) and better-than-expected U.S. demand.
The company continues to believe PC unit growth will accelerate through year-end and expects consensus expectations for PC unit growth to trend toward 15%. Continued strength in emerging markets, consumer and the beginning stages of a corporate PC upgrade cycle in the second half will drive improving growth rates through year-end, says the firm.
HP remains the top vendor on a worldwide basis with 19.3% unit share, followed by Dell (16.1%), Lenovo (8.3%), Acer (7.2%) and Toshiba (4.1%). Dell was the top vendor in the U.S. with 28.4% market share, followed by HP (23.6%), Gateway (5.6%), Apple (5.6%), Toshiba (5.3%) and Acer (5.2%). Apple had a particularly strong quarter with growth of 26% year-over-year.
PC pricing remains benign despite the favorable component cost environment, DB says.

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