Asustek Computer has adjusted downward its revenue and shipment forecasts for the second quarter of 2010 amid the traditional weak season and dropping demand from Europe, as well as depreciation of the euro and Greece's bond crisis. Other notebook vendors are expected to be affected as well.

In previous reports, Asustek president and CEO Jerry Shen said he believed the bond crisis in Europe and dropping euro exchange rate would not affect the company's notebook shipment and sales significantly in May and June; however, Shen has recently changed his forecast saying that the uncertainty of Europe's economy and dropping of the euro's value is in fact impacting the company's shipments and sales outlook for both the second and the third quarters of the year.

Shen estimates that the company's notebook and netbook shipments, as well as its overall revenues in the second quarter will stay flat sequentially; however, market watchers believe Asustek will see a 5-10% sequential revenue drop in the second quarter. The company has also increased the extent of the decline in its second-quarter motherboard shipment forecast.

Shen pointed out that the euro issue will have a greater impact on the third quarter, the traditional peak season, as it could weaken demand. Therefore, the company is currently running some measures to manage product and component inventories to minimize the risk.

China is another unstable market for which Asustek has concerns with for the third quarter as the company is already seeing dropping notebook demand in the market in the second quarter. Meanwhile the company also believes China's new policies for housing will create some uncertainties toward the China PC market in the second half; however, if the issues turn out to be fine, performance in China should be able to cover the company's declines in Europe.

Asustek's revenue proportion from Europe in the first quarter dropped from 51% in the fourth quarter of 2009 to 41%, and is expected to drop to 35% in the second quarter.

Although Acer has said it remains optimistic about future demand, sources from upstream component makers revealed that several notebook vendors including Acer have all already started to reduce their internal shipment and revenue forecasts for the second quarter as well as working on reducing their component reserves.