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Laptop makers standardizing parts

The Fair Trade Commission yesterday approved an application by three of the country's major notebook computer makers to jointly develop standard components for laptops in order to reduce costs and enhance competitiveness.

"We believe the plan will benefit the development of Taiwan's information technology industry," the commission said in a statement.

The application was filed by Quanta Computer lnc (廣達電腦), Compal Electronics Inc (仁寶電腦) and Asustek Computer Inc (華碩電腦) in response to Intel Corp's Common Building Block (CBB) program, an initiative introduced by the US firm in 2004.

The program aims to establish standardized components for use in notebook computers that could lead to lower costs and enhance competitiveness.

Components involved in the program include hard-disk drives, optical-disc drives, liquid-crystal display (LCD) panels, battery packs, power adapters, keyboards and customized notebook panels.

During a keynote address at the Intel Developer Forum in Taipei last week, Bill Siu, a vice president and general manager of Intel Taiwan's channels platform group, said that Quanta, Compal and Asustek will offer 11 laptop models and the first batch of notebook computers carrying components that adhere to the program's seven common specifications will begin shipping within the next two weeks.

More than 25 component suppliers are involved in the CBB program, the majority of which are based in Taiwan, Siu said.

"Standardizing components for laptops will further boost sales of the products, as lower prices should help laptops grab some market share from desktop PCs," said an official at Compal Electronics, who spoke on condition of anonymity.

The standard components, however, are expected to be applied on second-tier brand notebook computers, rather than leading global brands such as IBM, HP and Dell, as those companies have their own designs for a variety of models, he said.

The official added that the cost reduction derived from the program would be limited for the company, as more than 90 percent of Compal's orders come from the major global computer brands.

The Fair Trade Commission said in the statement that brand-name notebook computers accounted for more than 80 percent of the domestic market, with the clone market making up the remainder. The commission expects the adoption of common specifications will give the clone market a boost, as it encourages buyers to assemble their own computers, as what consumers have done in the desktop computer field.

But the Compal official said that the do-it-yourself trend may not take off that easily in the notebook computer market, as there are technical hurdles that cannot be easily solved by the average computer user.

Although the commission has approved the joint component development plan, it also warned the three companies against doing anything that may be deemed as unfair competition or monopolizing the market.

The approval gives the three companies three years to work on the program and will expire on April 19, 2009, the commission said.
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