Due to lower than expected demand and increasing competition from tablets as well as the launch of Windows 8 notebooks, inventories of notebooks in Europe and China are likely to rise to high levels in the fourth quarter of 2012, according to sources from Taiwan-based supply chain makers.
Although notebook brand vendors had been controlling their retail channel inventory levels to avoid over-stuffing that could force them to implement price cuts down the road, the reported increasing inventory levels in retail channels in Europe and China indicate that some brand vendors have started dumping inventories from other markets.
The sources pointed out that retail channel inventory levels in Europe may peak in October and if demand for Windows 8-based notebook models turns out to be weaker than expected, pressure from the piled-up inventories may trigger a new wave of notebook price cuts in both Europe and China.
Meanwhile, rising inventory levels are also expected to force the brand vendors to reduce their orders to ODMs and upstream component makers in the fourth quarter, the sources noted.
Source: DigiTimes
