Like most of its global competitors, such as Apple Inc, Asustek Computer Inc (華碩) is also counting on China to grow its new smartphone business and to hit its ambitious shipment target of 30 million units this year, more than tripling last year’s 8.5 million units.
Ahead of its official launch in Beijing today, the PC maker has about 2 million pre-sale orders for its latest flagship Zenfone 2 in China. That is a huge step for Asustek, which only sold between 600,000 and 700,000 smartphones in China last year.
“We hope the contribution from China will rise from last year’s 7 to 8 percent to 30 percent of total smartphone shipments this year,” Asustek chief executive Jerry Shen (沈振來) told reporters before a product launch in Beijing on March 27.
Photo: CNA
That translates into a shipment target of 9 million handsets in China this year.
China shipped a total of 420.7 million handsets last year, market researcher International Data Corp (IDC) said. Shipments are expected to grow 10 percent year-on-year to more than 462 million units this year, IDC said.
Asustek’s shipment target of 9 million units could help the firm gain nearly a 2 percent share of the Chinese market this year.
The company has raised its global smartphone shipments forecast three times in two months because of its optimism about the Chinese market.
At an investors’ conference in February, Shen said the smartphone business would become profitable when the firm ships more than 12 million units and that it expects to sell more than 17 million units by the end of this year.
During a Zenfone 2 product launch in Taiwan last month, Asustek chairman Jonney Shih (施崇棠) said the firm aims to triple its global smartphone shipments to 25 million units this year.
Two weeks later, Shih said he sees the company selling 30 million handsets this year.
Asustek chief financial officer David Chang (張偉明) told the Taipei Times that Shih raised the shipment target to 30 million units mainly because the company believes its new flagship product will be a great success in China.
“Zenfone 2 is the first and only smartphone that offers 4GB RAM globally. That unique spec has caught the eye of consumers,” Chang said, citing an enthusiastic response to the handsets in China, Taiwan and Europe.
Chang said 80 percent of global demand for the Zenfone 2 is for the 4GB RAM model, which is a good thing for the company because the model is priced higher and has a higher margin compared with the firm’s other handsets.
To gain a market share in China, Chang said Asustek last year launched the sub-brand Pegasus smartphone, which uses chips made by Qualcomm Inc and MediaTek Inc (聯發科), targeting the lower-priced segment of the market.
Expanding to the higher-priced segment this year, the company expects the mid-range 5.5-inch Zenfone 2, which is equipped with an Intel Corp processor, to complete a range of smartphones in the market and drive the firm’s sales performance, Chang said.
Generally, Intel processors cost more than those made by Qualcomm or MediaTek, but Intel is the only firm capable of making 4GB RAM available at the moment. Asustek plans to adopt Qualcomm’s processor when it is able to match Intel’s technology, Chang said.
The cost of the processor affects a smartphone’s price strategy and the product’s margin.
The Pegasus is priced between 899 yuan and 999 yuan (US$146 and US$163), while the Zenfone is priced at 2,000 yuan, the company said.
As part of its sales strategy, Asustek has partnered with Chinese telecoms to sell the Pegasus, while Zenfone 2 would be available via local retailers and online shopping sites, the company said.
At the end of last year, Asustek invited Chinese telecommunication equipment provider ZTE Corp’s (中興通訊) former vice president Wang Yong (王勇), who has wide experience with Chinese telecoms and retailers, to be Asustek’s deputy general manager for its Chinese smartphone business.
Asustek’s smartphone segment accounted for 17 percent of the firm’s total revenues of NT$477.4 billion (US$15.25 billion) last year, Shen said, adding that the company hopes the revenue contribution from the segment would grow to 30 percent this year on the back of growing demand in Taiwan and emerging markets.
“We hope the smartphone segment will account for more than 50 percent of our total sales by 2017, contributing more revenue than our PC products,” Shen said.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
AI-FUELED DEMAND: The company has been benefiting from the skyrocketing prices for DRAM chips amid the AI frenzy, especially its core product — DDR4 DRAM chips DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported that its revenue for the first quarter surged 582.91 percent to NT$49.09 billion (US$1.54 billion) from NT$7.19 billion a year earlier, as the supply crunch caused chip price spikes. Last quarter’s figure is the highest on record. On a quarterly basis, revenue jumped 63.14 percent from NT$30.09 billion, the company said. In January, Nanya Technology expected global DRAM supply scarcity to continue through the first half of 2028, thanks to strong demand for artificial intelligence (AI) applications. Market researcher TrendForce Corp (集邦科技) forecast prices of standard DRAM chips would rise between 58 percent and 63
RSS