Taiwan's Inventec expects earnings boost from AI assistants
President hints at securing Apple orders for Amazon Echo-like device
CHENG TING-FANG, Nikkei staff writer
TAIPEI -- Inventec, a Taiwanese contract electronics maker that supplies Apple's AirPods and the activity-tracking wristbands for U.S. company Fitbit, sees gadgets powered by artificial intelligence assistants, including smart speakers and smartphones, as a growth driver for the company in 2017.
"For this year, AI voice-assistant-related devices are the most talked about subject, and many device makers are thinking about rolling out such products after seeing the success of Amazon Echo," David Ho, president of Inventec Appliance, a wholly owned subsidiary of Inventec, told reporters on Monday. The Amazon Echo is a smart speaker that connects with a voice-controlled intelligent personal assistant.
Ho said his company is receiving orders for two to three types of devices equipped with AI assistant functions.
Ho confirmed that his company had secured orders for both "open" and "closed" AI assistant platforms, suggesting that Inventec Appliance will be making an Amazon Echo-like device for Apple.
Open platforms usually mean technology that third parties can adopt for their own use. In the context of AI assistants, they include Google Assistant, Microsoft's Cortana and systems created by such Chinese tech giants as Baidu and iFlytek. These companies all license their technologies to others.
A closed platform usually refers to Apple's own iOS and Siri technology, which the U.S. tech titan does not license to other companies.
Asked whether he thought voice-controlled products would become a hit this year, Ho said he was not sure.
He also declined to comment on when his company would ship those orders for products with AI assistants, saying only that Inventec Appliance's shipments in the second half of 2017 would be larger than those in the first half.
Ho said his company's shipments for all products would increase to about 70 million units for 2017, from some 58 million in 2016. That includes wireless speakers, wearables, smartphones, GPS devices and other items. He declined to give specific numbers for each segment.
He was confident that the company would post higher revenue and net income for 2017, saying earnings would be the highest since 2009, when the global financial crisis hit.
Arthur Liao, an analyst at Fubon Securities, said, "We believe Inventec Appliance did get orders to make new products for Apple with AI voice control technology, but we are not very optimistic about the shipment volume. ... It would be just a couple of million units."
"The contribution of such product to the supply chain could still be limited," Liao said. "... After all, it's still a nascent area that draws great attention but needs time to develop demand and an ecosystem."
There are reports that Apple may roll out a Siri speaker product this year to compete with the Amazon Echo. The latter already controls more than 70% of the market for voice-enabled speakers, according to market research company e-Marketer.
U.S. research company Consumer Intelligence Research Partners said that since introducing the Echo in late 2014, Amazon had sold about 8.2 million units as of the end of 2016. Amazon Echo devices are currently manufactured by Hon Hai Precision Industry, known as Foxconn Technology Group, according to Fubon's Liao.