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EL SEGUNDO, CA – The credit crisis came home to roost for the global PC market in the fourth quarter of 2008, ending a sustained period when sales seemed to defy economic gravity, according to iSuppli Corp.

“Although consumers around the world started to feel the full impact of the credit crisis in the third quarter of 2008, this phenomenon didn’t negatively impact PC sales,” observed Matthew Wilkins, principal analyst for compute platforms at iSuppli.

“However, by the fourth quarter, even the PC market succumbed to economic reality, with shipments declining 1.5% compared to the third quarter.”

Global PC shipments amounted to 77.9 million units for the quarter, down 1.5% sequentially.

“The impact of the credit crunch is clearly apparent in the PC shipments, given that the historical average for sequential fourth-quarter PC growth is in the region of 10%,” Wilkins added. The sequential decline in shipments is a factor of the limited availability of credit, for both businesses and consumers. As a result, the money that is available must be used sparingly, leaving less for PC purchases.”

Despite the lower-than-expected performance of the PC market in the fourth quarter, 2008 shipments yielded impressive growth of 11.6% year-over-year, reaching 299.4 million units. This compares to 12.4% growth in 2007.

The strong rise in 2008 PC shipments was entirely generated by notebook demand, says the firm. Notebook PC unit shipments rose 35% last year, up from 30% the prior year.

Meanwhile, desktop PC shipments declined 4%, compared to 3% growth in 2007.

“In the PC market, mobility is king,” Wilkins said. “This is because the prices, features, performance, and convenience of mobile PCs are striking a chord with both consumer and business users. The results in 2008 illustrate what is likely to happen for years to come: declining sales of desktops and rising volume for notebooks.”

Global notebook PC shipments exceeded those of desktops on a quarterly basis for the first time ever in the third quarter, marking a watershed event in the history of the industry, says iSuppli.

The trend continued in the fourth quarter, with notebook shipments exceeding those of desktops by 3%.

However, for the entire year, desktop shipments exceeded those of notebooks by 9%.

As a result of rapidly changing market conditions, iSuppli has revised its 2009 unit growth forecast to 0.7%, down from 4.3%.

“iSuppli expects an acceleration of the decline in the desktop segment in 2009, along with a reduction of the growth rate in the notebook segment, leading to weak growth for the year,” Wilkins said.

The rankings of the Top 5 PC makers remained the same sequentially in the fourth quarter. Hewlett-Packard retained its No.-1 ranking for the quarter, with shipments of 14.5 million, and a market share of 18.6%. Dell was second with shipments of 10.3 million, giving the company a share of 13.2%. Rounding out the Top 3 was Acer, with an 11.8% share on 9.2 million units shipped. Lenovo and Toshiba ranked fourth and fifth, respectively, with shares of 7.1 and 4.7%.

For 2008, Acer grew much faster than the overall industry, at 57.9%, while the No.-1 and No.-2 ranked PC OEMs – H-P and Dell – experienced growth in line with the overall industry, at 12.9 and 9.5%, respectively.

Outside the Top 10, Asus and Apple both made notable advances, with Asus expanding its shipments 145%, and Apple 30%.

REDMOND, WA – Data I/O Corp., provider of manual and automated device programming systems, reported fourth-quarter 2008 revenues of $5.6 million, down 27.3% year-over-year.

Net income was $78,000, compared with net income of $1.09 million in the same quarter of 2007. This includes a restructuring charge primarily related to severance of $535,000.

For full-year 2008, revenues were $27.6 million, up 2.9% year-over-year. Net income was $5.13 million, up 83.8% compared to 2007.

Fred Hume, president and CEO, said, “We had success in acquiring new customers and had strong orders from European customers. During the fourth quarter, we also took action to further reduce our operating expense to bring our estimated revenue breakeven under $5 million per quarter, while increasing our cash reserves to $13.3 million."

EL SEGUNDO, CA -- Although the outlook for the overall mobile handset market continues to dim, smartphones remain a bright spot with global unit growth as high as 11.1% in 2009, iSuppli Corp. predicts.

HARTLEPOOL, UK – Electronic manufacturing services company Stadium Group reported 2008 revenues rose 17% to £47.6 million and pretax profits were up 5% to £2.78 million, aided by the acquisition of Zirkon Ltd. Operating profits from Stadium Electronics and its subsidiary Stadium Power were above 25%.

Net cash flow was down 15% to £4.12 million for the year.

Chief executive Nigel Rogers said customer demand and visibility have been weak as 2009 gets underway. "We have experienced weakening of customer demand in the opening few weeks of 2009, and these conditions are expected to prevail in the short term. The full extent of the global downturn and its impact on manufacturers worldwide is as yet unclear. “

On Oct. 31, the Stadium acquired EMS provider Zirkon, and said today the integration of its operations “is progressing very well.”

1 GBP (£)= 1.41297 US$

JACKSON, MI -- Sparton Corp. will close its Jackson, MI, manufacturing operations by than June 30, hoping a reduction in excess capacity will help restore the EMS company to profitability. The move will put 206 employees out of work.

KUALA LUMPUR -- Flextronics International will close its factory in Shah Alam, putting nearly 1,400 employees out of work, Reuters reported today.

BANGKOK -- Top electronics manufacturing services company Hana Microelectronics’s 2008 sales were flat year-over-year at $452 million. Operating profits were also flat, at $55.5 million. Net profits fell 22% in Thai currency.

The 2007 figures, however, included the sale of a large subsidiary. Hana gained Bt504.6 million from the sale of Advance Interconnec Technology in September 2007.

Hana is the world’s 33d largest EMS firm, according to Circuits Assembly’s rankings. Its microelectronics unit's sales were up 1% for the year, despite a 13% drop year-over-year in the fourth quarter.

The company's sales and operating profits were down 3% and 4%, respectively, in Thai bahts, but adjusted for US currency changes, were essentially flat.

In a press release, Hana said, "The drop in demand experienced in the fourth quarter has continued and worsened in the first quarter and we anticipate it to continue into the second quarter. As a result we anticipate the possibility of an operating loss for the first half of the 2009. We have undertaken appropriate measures in headcount reduction (approximately 12%), short working week, payroll cuts for management and cancellation of certain bonus schemes. These will be reviewed in light of the on going economic situation."

1 THB (Bt) = 0.0277045 US$

OXFORD, CT – Mirtec Corp. has purchased a 5,000 sq. ft. facility to accommodate its North American sales and service division.

The Oxford, CT, facility will be equipped with demonstration and training facilities for the company’s AOI product line.

“This expansion is in direct response to growing demand for our products and services, resulting in a significant increase in market share throughout North America,” said Brian D’Amico, president of Mirtec's North American subsidiary.

Last year, Mirtec’s parent company in Korea acquired a 35,000 sq. ft. manufacturing facility in Seoul.

TEMPE, AZ -- The US manufacturing sector contracted in February for the 13th consecutive month, according to the latest survey of the nation's executives.

TAIPEI -- Hon Hai (Foxconn) and IBM reportedly are set to sign a pact to codevelop environment-friendly products.

HELSINKI -- Months after watching Apple steal its thunder in the 3G market, Nokia is readying to return the favor.

Nokia CEO Olli-Pekka Kallasvuo said the world's largest cellphone maker plans to enter the laptop market to capitalize on trends toward cellphone and PC convergence.

According to a report last week by Citigroup, Nokia's first computer will launch in the first half of 2010. The PC, either a netbook or a PC tablet, will probably feature an Intel Atom microprocessor and Linux operating system, Citigroup said. The analyst believes Nokia will outsource production to Compal Electronics or Hon Hai (Foxconn).

Netbooks -- low-cost, stripped-down PCs with minimal software and processing power -- are the fastest-growing segment of the PC market, according to several research firms.

BINGHAMTON, NY – A Universal Instruments spokesperson is disputing a published report in an online newsletter claiming the company has been sold and is being liquidated.

The March 3 edition of CircuitNet claimed, “It appears that Francisco Partners has sold the company to Patriarch Partners LLC, a private equity investment firm.” The story further asserted that Patriarch “is currently managing the day-to-day activities within the company and plans to sell off assets.”