Feature: Asustek ready to ship Eee PCs later this month

When Jerry Shen (沈振來), president of Asustek Computer Inc's (華碩電腦) open optimum platform business, recently went on an overseas business trip, his luggage contained three of the company's yet-to-be-launched Eee PCs.

The machines each measure 22.5cm wide by 16.5cm deep and weigh only 0.89kg. He used two of the units for business presentations, while the other was for his personal use.

The much-touted machines will finally hit the stores later this month.

"We look forward to Asustek starting to ship Eee PCs," Kirk Yang (楊應超), an analyst at Citi Investment Research, said last week.

Asustek plans to promote Eee PCs -- the acronym stands for "easy to learn, easy to work and easy to play" -- through three channels: the firm's current PC channels, government programs and telecoms operators.

"Selling via the PC channels means that Eee PCs will enjoy the same gross margin level as its own brand notebooks," Yang said in a report dated Sept. 5.

Promoting the PCs to government agencies would provide the lowest margins, while the cooperation with telecoms operators would offer margins inbetween the other two channels, he said.

The Eee PCs are targeted at elementary school children and parents who want to hook up with the information age. The first shipment consists of 10,000 units.

Total shipments should reach 300,000 units by the end of the year, and the plan is to ship 3 million next year, the company said.

"The launch is for worldwide markets, including China, the US, Europe and Asia-Pacific. We are not sure how many will be allocated to Taiwan," Asustek product manager Jose Liao (廖逸翔) said in a recent interview.

Promotional activities are still being finalized, he said.

Yang said Asustek would limit the Eee PC's screen size to between 7 inches and 9 inches and include a small-capacity flash memory module, to differentiate it from normal notebook products.

The Linux-based Eee PCs can also work with the Windows operating system, Yang said.

Despite Asustek's launch of the small and simple computer, larger rival Acer Inc is in no rush to hop on the bandwagon.

"It is a great idea, but it would have a better chance if it came out four years ago, when notebook prices were sky high," said Scott Lin (林顯郎), president of Acer's Taiwan operations.

For now, the competition among portable computers is "all about specifications and price," he said.

Currently, a notebook equipped with a Celeron 530 processor and an 80-gigabyte hard drive sells for as little as NT$21,900 (US$663), making it much more attractive than an Eee PC, he said.

Eee PCs use Intel's Dothan Pentium mobile processors and have only 4 gigabyte of flash memory, and will likely sell for about NT$14,900 on the local market, an Asustek source said.

Lin said Acer was not worried about low-cost PCs gaining a large share of the market.

"Computer makers such as Wistron Corp (緯創), Compal Electronics Inc (仁寶電腦) and Quanta Computer Inc (廣達電腦) all have similar products ready. We could easily bring this type of model to the market within three months," Lin said.

Quanta, whose One Laptop per Child (OLPC) project is viewed as a rival to the Eee PC, also said it was not worried.

"The low-cost PC pie is big enough for everyone to take a piece," Quanta spokesman Elton Yang (楊俊烈) said.

He said OLPCs, set to be shipped in the fourth quarter, are targeted at the low-end segment of the market in developing countries and would therefore not be in direct competition with the Eee PC.