Local industry representatives are predicting the whitebox market will keep contracting as desktop sales decline and notebooks rise. But while manufacturer numbers dwindle, many argue local assemblers can still make successful niche plays. According to the latest IDC quarterly PC figures, whitebox lost share again, falling from 31 per cent of total PC sales in Q4 2005 to 24.1 per cent in Q4, 2006. In desktops, whitebox dropped by 7 per cent year-on-year to 42.6 per cent.
PC analyst, Liam Gunson, predicted further consolidation in the local assembler space. However, he claimed the rate of decline would slow towards the end of this year and into 2008.
"A lot of refresh cycles come back into the market in the commercial space then, which ties back into the desktop space," he said. "Although the market will continue to contract, it will slow up once refreshes start to come through."
Ingram Micro components manager, Danny Kwoh, agreed with Gunson's assessment that more players would exit the market.
"The overall PC business is still doing well, but OEM partners are definitely dying," he said.
Kwoh singled out two factors compounding whitebox decline: the rapid rise of notebooks in the consumer sector, and tier-one manufacturers trying to regain business in the desktop market. He said traditional whitebox strongholds - education and corporate - were now dominated by multinationals.
"Acer and Dell have come back very aggressively to attack the PC market. This is because it [the desktop platform] offers more extension and upgrade opportunities," he said. "I think tier-ones will continue to drive the PC business into 2008. That's where they are hitting the whitebox builders hard."
One of the key problems with rising notebook adoption was that local builders were finding it difficult to add value and differentiate, Synnex managing director, Kee Ong, said.
Intel's efforts to assist builders by standardizing notebook components had not impacted multinational sales, he said.
"It's hard for smaller players to get the adequate specifications and price off the notebook bare bones. That's why multinationals dominate the market," Ong said. Despite this pessimistic assessment, he said whitebox would never disappear from the market.
"It's still declining, and probably will do so by another five points, but I think it will stabilise," he said. "Some players, especially in that small to medium business market, are remaining steady and finding a way to sustain a position in the market. For the big guys, their best weapon is to focus on services. The tier-ones can't service all customer needs."