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Netbook Pioneer Asustek Enters the iPad Age Asustek is introducing tablets in response towards the Apple blockbuster but nonetheless sees a long term for netbooks. Thus far, traders aren't convinced
By
Bruce Einhorn and
Tim Culpan
(Corrects the spelling of Asustek in the headline)
Little pcs happen to be good to Asustek. The Taiwanese business in 2007 introduced the very first netbook,
Microsoft Office 2010 Sale, people low-priced mini-laptops that have been the Computer industry's fastest-growing merchandise for the previous two decades. Netbooks now represent practically forty percent in the Asus brand's income and have been the key issue in assisting Asustek tie Lenovo because the world's No. 5 moveable Pc firm, according to researcher International Data Corp.
Now it appears just like the netbook growth engine is dropping steam. Netbooks' reveal of the worldwide Pc market place will most likely be flat this 12 months at twelve %, IDC estimates. Rather, shoppers are flocking to tablets such as Apple's (AAPL) iPad, which offer many of the benefits of netbooks. For Asustek, that means creating an enormous push into tablets while attempting to convince companies and customers that you can find even now advantages to netbooks.
On May well 31, Asustek unveiled its initial weapons within the battle in opposition to the iPad: the Eee Pad as well as the Eee Tablet. Like Apple's gadget, the Eee Pad—available next winter—will have a touchscreen, an embedded keyboard, and videoconferencing capability. Unlike the iPad, the Asus machine will sport an Intel (INTC) processor and use the
Windows 7 operating system. The Eee Tablet, to hit the marketplace in early 2011,
Genuine Windows 7 X64, is an electronic book reader with a touchscreen and built-in camera that allows users to write notes on photos. The new gadgets could be "key drivers for Asustek's product sales and earnings progress inside the coming many years," KGI Securities analyst Angela Hsiang wrote in a June 1 report.
Asustek will have plenty of competition,
Office 2007 Product Key Sale, even aside from the iPad. Dell (DELL) has launched a mini-tablet called the Streak, and almost every other Computer maker has a tablet from the works, though some have delayed launches inside the wake from the iPad. Even though the new Asus machines will hit stores before most in the competition, traders clearly have doubts about Asustek's strategy. Its Taipei-listed shares dropped 18 percent this 12 months through May 17, when stock income were suspended pending the upcoming spinoff of the company's manufacturing arm. One investor worry is that Asustek can't supply as a lot of apps as Apple can. "They have a very good merchandise but the environment is not ready; there's still not enough content," says Robert Cheng, an analyst in Taipei with Credit Suisse (CS). Another problem is that the Eee Pad will have about six hours of battery life, four hours less than the iPad.
Asustek CEO Jerry Shen believes he still can tap a vast corporate marketplace for netbooks. The company is tinkering with design, moving away from the current clamshell look to sleeker one-piece models—a kind of tablet shape but with a physical keyboard. Asustek "will have a lot of different types of netbooks that can nonetheless provide a better user experience" than tablets, says Shen.
To hedge in opposition to an enormous decline in netbook popularity, Asustek is heading upscale. In May the firm launched notebooks with Bang & Olufsen sound systems and released a line of laptops with bamboo on the lid, using 20 percent less plastic than other machines. "We still have a lot of innovation going on," Chairman Jonney Shih says, showing off the private lab adjacent to his office where he retreats to clear his mind by tinkering with Asus gadgets.
One of Asustek's most offbeat innovations is its product-testing strategy. A Buddhist vegetarian, Shih is a supporter of the Tzu Chi Foundation, one of Taiwan's biggest Buddhist charities. He enlisted Venerable Dharma Master Cheng Yen, the foundation's 73-year-old founder, to help test e-readers. Cheng Yen "is the best quality assurance,
Buy Windows 7 Home Basic," Shih says. "She is so patient." As Asustek tries to match the iPad, he'll need patience from customers, too.
The bottom line: Asustek is working on new tablets as revenue of its mainstay machines, tiny netbooks,
Genuine Windows 7 Key, begin to flatten.
Einhorn is Asia regional editor in Bloomberg Businessweek's Hong Kong bureau.
Culpan is a reporter for Bloomberg News
.
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