Distributors and OEM clients holding off on purchases will hurt June sales for optical drive makers
Taiwan’s major optical storage drive manufacturers all posted lower revenues in May and predict weak sales in June, weighted down by the current slow PC season.
Lite-On IT, Behavior Tech Computer (BTC), Benq, AOpen and Ultima Electronics say the declines in May from April came in worse than expected at 10% to over 30%, with BTC and Ultima being the hardest hit. BTC is the only company that reported a year-on-year decline.
The manufacturers blame the drop on a sharp reduction in orders amid continued weakness in the PC market. Downstream distributors, still in the middle of working off high inventory in 24x and 32x CD-RW products, have been holding off on purchases as well, they say.
Despite hopes that launches of new high-speed CD-RW drives will lift sales, sales for June will likely bottom out as OEM clients and distributors sit on their hands awaiting signs of improving demand, the manufacturers added.
Leading optical drive maker Lite-On IT, for instance, said its revenues for June will fall rather than rise based on its weaker-than-expected May performance. AOpen also predicts lower sales, citing the dim outlook for the European market and reduced activity of OEM customers. Ultima expects its sales for June to remain flat, while BTC is confident about a moderate rebound after its 36.7% decline in May sales.
The companies’ pessimistic sentiment also has raised fears about the strength of an anticipated recovery in the July-September quarter and whether it can match the strong growth in the first quarter.
The manufacturers blame the drop on a sharp reduction in orders amid continued weakness in the PC market. Downstream distributors, still in the middle of working off high inventory in 24x and 32x CD-RW products, have been holding off on purchases as well, they say.
Despite hopes that launches of new high-speed CD-RW drives will lift sales, sales for June will likely bottom out as OEM clients and distributors sit on their hands awaiting signs of improving demand, the manufacturers added.
Leading optical drive maker Lite-On IT, for instance, said its revenues for June will fall rather than rise based on its weaker-than-expected May performance. AOpen also predicts lower sales, citing the dim outlook for the European market and reduced activity of OEM customers. Ultima expects its sales for June to remain flat, while BTC is confident about a moderate rebound after its 36.7% decline in May sales.
The companies’ pessimistic sentiment also has raised fears about the strength of an anticipated recovery in the July-September quarter and whether it can match the strong growth in the first quarter.
