Digitimes: Pixart expects Q1 2011 revenues to decline 20% sequentially due to inventory adjustments by games console clients, company chairman Huang Sen-huang said. The gross margin will fall below 40% to around 35-36%, according to Huang.
Q1 shipments have been hampered by Nintendo lowering its shipment forecast for the Wii from 17.5M units to 16M units. Pixart is projecting a 60% sequential shipment decrease for its games console product lines which will constitute 14% of the company's quarterly revenues, down from 28%, Huang said.
For mouse and optical touch controllers, Huang forecast that first-quarter performance will stay flat, but Pixart's overall revenues could still slip 20% sequentially. Optical touch controllers currently represent 5-10% of Pixart's revenues, Huang indicated, noting that in the future, Pixart will focus on the 10-to-30-inch consumer electronics segment.
Huang believes optical touch technology has cost advantages in all-in-one (AIO) PC's large-size screens, but actual AIO shipments in 2010 were only 6-8 million units, much lower than the projected 12-14 million units. Moreover, Apple's AIO, which does not incorporate optical touch screen features, grabbed the largest market share, meaning shipments for optical touch AIO models totaled about 2-3 million units.