Asustek outlook rosy on tablet demand: experts

By Kevin Chen  /  Staff reporter

Mon, Oct 15, 2012 - Page 13

Asustek Computer Inc (華碩電腦) is expected to see its tablet shipments increase 20 percent this year and expand more than 50 percent next year, riding on the success of a tablet computer co-branded with Google Inc, a local brokerage said last week.

In a research note issued on Tuesday, Fubon Securities Investment Services Co (富邦投顧) said it expected Asustek to ship 6 million tablets this year and 9.4 million units next year, up from its earlier estimates of 5 million for this year and 6 million for next year.

“We raised our tablet shipment forecast on expectations of better-than-expected demand for the Google Nexus tablet,” Fubon Securities analyst Arthur Liao (廖顯毅) said in the note.

On June 27, Google and Asustek launched the Nexus 7 tablet in a bid to use the cheaper Android device to take on Amazon.com Inc’s Kindle Fire HD. Both tablets features 7-inch screens and are sold for US$199.

Asustek CEO Jerry Shen (沈振來) said on Aug. 29 that the company would ship 5 million tablets this year, up from an earlier estimate of 3 million, and the company aims to become the world’s No. 1 Android-based tablet brand next year, he told investors at a Taipei conference

Shares in Asustek have risen 36.89 percent so far this year amid optimism that the world’s No. 5 PC vendor will successfully enhance its capability to include both tablets and smartphones into its product line at a time when global PC makers are struggling with slowing demand and seeing tablets erode their sales. The shares gained 1.55 percent to close at N$295 in Taipei on Friday.

The company is also benefiting from a higher volume of PC shipments and larger market share. On Thursday, Gartner Inc and IDC Corp said in their latest industry reports that Asustek was one of the two top-5 PC vendors that registered growth in PC shipments in the third quarter. The other was Lenovo Group Ltd (聯想).

“We strongly believe that Asustek’s sales can avoid a drop next year through tablet and smartphone sales, compared with its peers,” Liao said.

Fubon Securities’ optimism was based on its recent channel check that showed consumer demand for the Nexus 7 had been robust. Asustek’s Eee Pad Transformer — which has a detachable keyboard dock and supports Microsoft Corp’s Windows 8 operating system — would also be popular among consumers due to its office functions, the brokerage said.

As a result, Fubon Securities said Asustek’s booming tablet business would easily offset its disappointing EeePC business, which will be suspended in the fourth quarter.

Meanwhile, Asustek said in an e-mailed invitation to the media last week that it is planning to unveil a new hybrid smartphone, the Padfone 2, tomorrow.

The second-generation Padfone will use new chips sourced from US-based Qualcomm Inc, the world’s No. 1 communication IC design maker, Shen said.

The cooperation with Google on the Nexus 7 and with Qualcomm on the Padfone 2 is expected to help the Taiwanese firm gain more resource allocation from the two US companies next year, paving a more solid path to re-enter the smartphone market after its failed previous efforts, Liao said.

Sales contributions from the smartphone segment are to be limited this year, but are to become more solid next year, he added.