Hewlett-Packard Taiwan announced a new business strategy yesterday targeting notebook PC sales at entry-level computer users.
That strategy -- adopted from International Business Machines (IBM) Taiwan -- centers on volume sales of low-priced notebooks.
"For decades HP Taiwan specialized in selling premium notebook PCs in Taiwan, but now we will expand our product line into entry-level products," said Jason Juang (
He explained that computers are more like commodities rather than luxury products for Taiwan consumers, so offering less-expensive selections is a necessary strategy to boost market share.
While notebook PCs priced between NT$50,000 and NT$70,000 used to account for 30 percent of the company's annual notebook sales, the company plans to switch to products priced below NT$50,000.
Yesterday, HP Taiwan put that plan into action by offering the Compaq Presario 1500, powered by an Intel Celeron 1.6GHz processor, for NT$36,900, the exact same price as a comparable IBM ThinkPad.
Fierce competition between the two international giants first broke out at the Taipei Info Month Show in early December.
At that time, IBM Taiwan aggressively cut retail prices on notebooks by about NT$8,000 displaying 11 models below NT$50,000.
The market reaction was positive with Big Blue reportedly generating more than NT$50 million in sales over the first two days of the show.
It was not until day three of the show that HP woke up, slashing up to NT$10,000 off the price of its notebooks.
HP's strategy also worked, as the company reportedly sold over 10,000 PCs in the 10-day show in Taipei, of which 40 percent were entry-level products.
Eyeing the profitable market, HP Taiwan decided to continue the practice.
"After realizing entry-level users' strong buying power, HP Taiwan [has decided] to make the short-term promotion a regular offer," Chen said.
He added that HP Taiwan hopes the move will make the company number one in the local market by the end of next year.
According to industry researcher Gartner, in the third quarter of this year, HP ranked third in Taiwan's notebook PC retail market, holding a 15 percent market share.
That figure was 1 percent higher than IBM Taiwan, with a 15 percent share.
Local brands Asustek Computer Inc (
Meanwhile, a market professional said heavy competition is forcing foreign brands to ax prices.
"Taiwan is the most competitive PC retail market in the world," said Hank Hung (
Employing the localized pricing strategy is a must to gain market share, he stressed.
Hung said that IBM Taiwan's aggressive strategy in pushing entry-level products has caught IBM head office's attention.
"We were well recognized...the head office was very impressed," he said.
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