With a 30% on-year drop in notebook sales in 2015, Brazil's notebook retail channel is suffering from a serious inventory pile up, and most brand vendors' orders for the country have turned weak since the fourth quarter of 2015, and several have even stopped pulling in orders for January and February. The issue has caused ODM/OEMs to halt most of their notebook production in Brazil.

Notebook vendors are closely monitoring channel inventories in Brazil and are pushing inventory digestion as the priority.

Notebook brand vendors including Asustek Computer, Acer and Samsung Electronics have been pushing into Brazil's notebook market over the past few years, while ODM/OEMs such as Foxconn Electronics (Hon Hai Precision Industry), Quanta Computer and Compal Electronics have also established production lines in the country to satisfy client demand.

With a weakening economy, rising unemployment rate, and inflation, Brazil saw demand for notebooks drop seriously in 2015 and demand is expected to stay weak in 2016. The issue is unlikely to be resolved until 2017.

Consumers in Brazil are also sensitive about notebook pricing, and over 60% of the country's notebook sales are models priced between BRL799-899 (US$220-248). To expand their presence in the market, notebook vendors are mainly pushing mid-range and entry-level models. Samsung, which achieved strong performance in Brazil with its entry-level models previously, is currently seeing the strategy impact its profits; therefore, Samsung recently rearranged its management team for Brazil, looking to adjust its strategy.

Although Brazil will host the Olympic Games in 2016, vendors expect the activity to have a limited benefit to boosting notebook demand. Since vendors are not able to raise their notebook prices due to competition, marketing in the country is also limited.