Citigroup remains downbeat toward PC industries as some new products introduced at the annual Computex fair last week are too expensive for most consumers, while others would be unable to generate a high margin for manufacturers.
During the five-day Computex, which closed on Saturday, Taiwanese PC brand Acer Inc (宏碁) presented its high-end Aspire S7 Ultrabook and 8-inch Iconia W3 tablet, while Asustek Computer Inc (華碩) unveiled its Zenbook Infinity and Transformer Book Trio laptops.
However, among the devices Acer showed at the Computex, only the Iconia W3, its first Windows 8 tablet, is a truly new product. Many of the others made their debut in New York early last month.
“We acknowledge that most of those notebooks pack more features and performance and also look much nicer than the previous generations,” Citigroup Global Markets Inc said in a report released on Wednesday.
“The problem is that with a sharp decline of PC usage as a result of replacement by tablets and smartphones, very few consumers are willing to pay a high price for PCs,” the report said.
Citigroup analyst Kevin Chang (張凱偉) estimates Acer’s Aspire S7 Ultrabook to cost between US$1,400 and NT$1,700 in different configuration sets while Asustek’s Zenbook Infinity and Transformer Book Trio laptops would have price tags of more than US$1,000 because they all run on Intel Corp’s latest Haswell chips.
“Notebooks have virtually no chance of success without right prices,” Chang says.
For PC brands to sell their products well, new laptops should be priced between US$500 and US$600 each, according to the report.
Acer has tentatively set the price of its W3 tablet at between US$329 and US$349, which is higher than Apple’s iPad Mini and Google Inc and Asustek’s Nexus 7 tablets and therefore unlikely to help drive Acer’s sales, the report said.
Asustek is also unlikely to generate a decent margin from its lower-priced tablet, MeMO Pad HD 7, which carries an attractive price tag of US$129 for a 8GB model and US$149 for a 16GB model, Citigroup said, predicting the company’s operating margin would fall below 5 percent during the second half of the year.
However, Bank of America Merrill Lynch has expressed optimism over Asustek’s second-half earnings outlook, saying that the company’s new products debuting at the fair have drawn lots of attention from international buyers.
In a research note dated on Wednesday, Merrill Lynch said the Transformer Book Trio can be used as a notebook, tablet or even a desktop computer, while the Memo Pad HD 7 tablet carries an attractive price tag of between US$129 and UT$149.
The brokerage also said the company’s new products are not likely to steal the spotlight from Asustek.
Meanwhile, Daiwa Securities forecast Asustek’s new notebooks, which boast a touch function and special casing materials, could drive the company’s earnings growth in the second half of the year.