Compal fires tablet R&D and testing staff. Non-iPads still not doing too well

In the tablet world, there’s the iPad… and not much else, it seems. At least in terms of market success, since you could say that there’s now a tablet launch every other week.

This situation has compelled Compal, one of the largest notebook and tablet ODMs in Taiwan, to lay off more than 100 employees responsible for tablet R&D and testing.

Translation: they aren’t receiving as many orders for tablets as they had hoped when they hired those people after tablet orders grew in 2011. Compal’s main clients for tablets are Acer and Lenovo. And while the Amazon Kindle Fire and the Asus Nexus 7 have been pretty successful, neither Acer nor Lenovo have best selling tablet offerings right now (nor did they ever). So it’s understandable that Compal would be slimming down.

The company has stressed that this will be the only round of layoffs, however DigiTimes‘ sources claim that there may be more.

At the top end of the market, Apple dominates with its iPads. Cheaper devices such as the Kindle Fire and the Nexus 7 are squeezing the ODMs’ profits, and anyway the new iPad Mini will probably negatively impact their sales in the near future.

So many ODMs were hoping to get big orders for Windows 8-based tablets, but Microsoft’s pricing of the Surface RT has cut into their profits too.

Compal isn’t the first ODM to undergo staff cuts. Quanta laid off over 1,000 production line workers in September 2011 because of a ‘large decrease in orders from RIM’, and Inventec let 432 employees go in October last year when HP reduced its tablet orders.

Author: Vlad Bobleanta

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