Asustek foresees five-fold growth in handset shipments

Asustek Computer Inc (華碩電腦), the world's largest maker of computer motherboards, aims to expand its mobile phone shipment five-fold this year in order to meet growing overseas demand, company officials said yesterday.

In a continuing effort to diversify its business after its success in expanding into own-brand laptop computers, Asustek now hopes to tap into the consumer electronics area, starting with handsets.

"We hope mobile phones will become the next product line to play a crucial role for Asustek," chairman Johnny Shih (施崇棠) told reporters.

Shih said he hopes to boost shipments to 1 million units this year, up from 200,000 units last year. Asustek launched its handset business last year.

"A bulky 70 percent of the amount will go overseas ? As a latecomer in the handset field, we are aggressively approaching telecom carriers for possible orders, which is the fastest way [to tap into the market]," said vice chairman Tung Tsu-hsien (童子賢).

"We've garnered quite a good response from our European clients," Tung said.

Asustek's latest model, a bar-type camera phone code-named the V55, will be available in Europe in the middle of the year, but under a different brand, Tung said, on the sidelines of a press conference to introduce Asustek's three latest mobile phones. The three, launched under the Asus brand, include the V55.

But, he declined to comment on whether the new customers would include Vodafone, the biggest telecom operator in UK, as a local Chinese-language newspaper reported yesterday.

The news boosted Asustek shares, however, to a 12-month high of NT$92 on the Taiwan Stock Exchange yesterday.

"It'll be no surprise if Vodafone places orders with Asustek as the Taiwanese company is making significant progress in product design. I would like to get an Asus phone myself," said Vincent Chen (陳豊丰), an analyst with CLSA Ltd in Taipei.

One of the best ways to make inroads into the business is to supply handsets to mobile carriers, but it may be difficult for Asustek, as a new entrant to the market, to duplicate the success of High Tech Computer Corp (宏達電), which supplies handsets to European 3G operator O2.

"As it's increasingly difficult to grab orders from existing rivals, it won't be easy for Asustek's mobile phone business to make a meaningful contribution to the company's sales in the next few years," Chen said.

Some 70 percent of the firm's NT$360 billion sales this year will come from its computer-related business, Chen said.

Chen rates Asustek as a stock that will "outperform."

With a 600-member handset research and development team, Asustek said it would quicken its pace in expanding its product portfolio this year.

Last year, the company launched only two models.

Asustek also plans to roll out more than one cellphone enabling next-generation, or 3G, technology, according to Tuang.