Wal-Mart in talks with Taiwanese notebook maker

Wal-Mart Stores Inc. has approached Taiwanese notebook manufacturer Arima Computer Corp. to discuss placing an order for notebook PCs but no deal has yet been reached between the two companies, according to an Arima executive.

“The order is not firm yet,” said Kenneth Tu, a sales executive at Arima. “At a certain level we have had some contact, but it is not at that stage.”

Reports that Wal-Mart had placed an order with Arima for 100,000 notebook PCs first surfaced in the Taiwanese press earlier this week. The reports said Wal-Mart is expected to begin selling the notebooks in the first quarter of 2004. However, Tu described those reports, which cited unnamed industry sources, as “not true.”

Wal-Mart began selling notebook PCs at stores in select markets during mid-2003, having previously sold notebooks on its Web site, according to a statement released Thursday by market analyst ARS Inc. Going directly to a contract notebook manufacturer, such as Arima or a rival manufacturer like Quanta Computer Inc., would allow Wal-Mart to begin selling PCs under its own brand name.

The entry of Wal-Mart into the market for low-end notebook PCs could have a significant impact on this segment of the PC market, ARS said. With more than 2,500 stores in the U.S., Wal-Mart has the ability to sell large volumes of notebooks and this could affect the sales of low-end notebooks by competing vendors, including Hewlett-Packard Co., Dell Inc. and Toshiba Corp., it said.

Wal-Mart would likely use an initial order for notebook PCs to test consumer demand, ARS said, predicting the retailer will offer notebooks with a 15-inch screen for less than US$800. The notebooks could be based on an Athlon XP processor from Advanced Micro Devices Inc. or a Celeron or Pentium 4 processor from Intel Corp., it said.

“Wal-Mart’s financial muscle will enable it to secure very competitive pricing from the contract manufacturers,” ARS said.