Asustek readies sub-US$200 PC

Asustek Computer Inc (華碩), the world's biggest computer motherboard supplier, plans to launch its sub-US$200 "Eee PC" laptop computer tomorrow.

The Taipei-based electronics company said it will initially sell the laptop, which industry watchers expect to go on to become a hit in emerging markets, through Best Buy and Newegg in the US.

The computer has been in the spotlight since Asustek showcased it at the Computex trade show in the summer.

"We are bullish about the low-priced PC. We think it is a very good concept," Kirk Yang (楊應超), a hardware analyst with Citigroup, said last week during a press briefing.

Low-priced PCs may become a big seller, duplicating the strong sales of cheap mobile phones in developing countries, Yang said.

Yang retained Asustek in his investment portfolio while scrapping other computer companies as a result of unusually weak demand in the fourth quarter.

"We expect explosive growth [in Eee PC sales] next year," Yang said, adding that he would personally consider buying one to surf the Internet, or to access his e-mail accounts on the go.

Jonathan Tsang (曾鏘聲), president of Asustek, told reporters last week that the company had orders for 1 million Eee PCs and aimed to sell several million next year.

Yang said he was impressed with Asustek's ability to get its product to market, compared with repeated delays in the similar One Laptop Per Child (OLPC) project.

Yang said he expected Quanta Computer Inc (廣達電腦) to once again miss the year-end shipment target for the OLPC. Quanta had initially planned to ship the first batch of OLPCs at the beginning of the year.

"We feel that the [Eee PC] could be very popular in developing markets, rather than just in emerging markets. [It has far more appeal] than the very low-end OLPC," CLSA Ltd (里昂證券) analyst Vincent Chen (陳豊丰) said.

Chen said the lightweight Eee PC would be capable of booting in 15 seconds and would run a customized version of the Linux operating system. He added that the notebook would be capable of running Windows XP, office software and Internet applications.

Tsang also reaffirmed that Asustek was on track to ship 4.2 million of its own-brand laptops this year.

Chen raised his investment rating on Asustek in August from "under-perform" to "buy," partly as a result of the pending introduction of the low-priced laptop. He set a target price for Asustek of NT$118.1 for the next 12 months, an upside of around 26 percent from Friday's closing price of NT$93.8.