Hedged In's  Instablog

I commented about this a while back, but it's still worth pondering for those who think that rising netbook volume will lead to higher revenues for the PC industry. 

Compal predicts a dramatic increase in its notebook shipments this year, but says that revenue will fall 3% due to the deflationary impact of netbooks:

"Compal Electronics Inc (仁寶電腦), the world’s No. 2 laptop computer maker, said yesterday that it expects to increase its shipments by as much as 37 percent this year to 35 million units, helped by growing demand for low-cost netbooks and a possible recovery in demand later in the year.

Compal aims to ship between 32 million and 35 million notebooks to customers this year, compared with 25.5 million last year, the company told investors.

However, the robust shipment growth might not translate into increases in revenues, it said. Revenues may be flat, or drop by up to 3 percent this year from roughly NT$405 billion (US$11.7 billion) last year as it would ship more lower-priced netbooks this year, driving down the average selling price (ASP). In 2007, Compal made NT$427.61 billion in revenues.

“Looking at global economic numbers, the outlook is bad. But our notebook business is holding up because of netbooks. We’d like to maintain margins. It is a challenge to hold our margins steady like most original design manufacturers [ODMs] do,” Compal president Ray Chen (陳瑞聰) said.

Neihu-based Compal currently derives 25 percent of its revenues from netbooks and expected the share to increase this year."

Source: Netbooks could boost shipments 37%: Compal