Wed, Oct 17, 2007 - Page 12 News List

Asustek raises Eee PC shipment target

POSITIVE FEEDBACK Encouraged by the response to its ultra-low-cost laptop, the computer giant raised its shipment target for next year by more than 30 percent

By Lisa Wang  /  STAFF REPORTER

Asustek Computer Inc (華碩), the world's biggest computer motherboard maker, yesterday said it expects shipments of its first ultra-low-cost laptop computers to top 5 million units next year on the back of strong demand from emerging markets.

The company made the comments on the sidelines of a product launch for its small notebook computer, code-named Eee PC, placing Asustek in competition with Quanta Computer Inc (廣達電腦), which assembles low-cost laptops under the One Laptop Per Child (OLPC) project.

"Eee" stands for "easy to learn, easy to work and easy to play," Asustek said.

"We believe there is great potential in emerging markets," Asustek chairman Johnny Shih (施崇棠) told a small group of reporters prior to the launch yesterday. "We are aggressively working with governments to sell [Eee PCs] through special projects."

The company raised its shipment target for the new notebook computer series to 5 million next year -- from its original forecast of 3.8 million -- in light of robust demand, Asustek president Jonathan Tsang (曾鏘聲) said.

"We are optimistic about next year," Tsang said. "We have received quite strong feedback on the Eee PCs."

By the end of the year, Asustek hopes to sell 200,000 Eee PCs, he said.

Shares of Asustek advanced 1.29 percent to NT$93.9 yesterday, ending four straight sessions of losses.

Asustek introduced yesterday the first batch of Eee PCs running on the Linux operating system and powered by Intel Corp chips, with prices ranging from NT$7,999 (US$245) to NT$13,888 per unit -- which is only about a third to half the price of Asustek's own-brand notebook computers.

Quanta's OLPC laptops is estimated to cost US$188 -- surpassing its original price target of US$100, the project's researchers said last month.

The Eee PC will hit stores in the US and Australia next week and will be marketed in China and Europe next month. A Windows-based version of the low-cost laptops will also be launched next month.

"We think the Eee PC will be a second or third computer for users rather than a replacement for their existing laptops," Tsang said.

Laptops sold to emerging countries through government contracts will be priced below US$250 each, Tsang said.

Asustek also plans to sell a more advanced version of the Eee PC using Intel chips exclusively designed for low-cost notebook computers early next year, Tsang said.

In contrast to the thin margins for OLPCs, Tsang said the Eee PCs would be a profit contributor.

Citigroup analyst Kirk Yang (楊應超) forecast the gross margin for Eee PC would be around 10 percent to 15 percent -- much better than the 5 percent to 6 percent for most local contract laptop computer makers.

Separately, Tsang said the company did not expect computer demand to weaken in the fourth quarter as some analysts warned.

"At the moment, we have not seen signs of sliding [demand]," Tsang said.

The company is keeping its full-year shipment target of 4.2 million for branded notebook computers, he said.

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