Three very interesting articles about Asus...
|Sources: Asustek and Lenovo may cooperate on manufacturing
David Tzeng, Taipei; Steve Shen, DigiTimes.com [Tuesday 8 March 2005]
Asustek Computer and China-based Lenovo Group have stepped up their contact, and this may lead to a cooperation agreement in production of notebooks and other consumer electronics products between the two companies, according to sources at Taiwan notebook makers.
Representatives of Asustek visited Lenovo in January, stating that it will establish an exclusive team to solicit OEM notebook orders and will also pass the orders on to its subsidiary, Asusalpha Computer, and therefore, the OEM business would not conflict with its own-brand notebook business, the sources said. In response, Yang Yuanqing, chairman of the Lenovo Group, plans to visit Taipei in the near future and will have a meeting with Asustek chairman Jonney Shih, the sources noted.
Yang had originally planned to visit Taipei early this month. However, he decided to postpone the trip to wait for an investigation result of the Committee on Foreign Investments in the United States (CFIUS) on Lenovo’s planned acquisition of IBM’s personal computer unit. The CFIUS is expected to make a decision on the project on March 14, the sources said.
However, sources at both Asustek and Lenovo’s Taipei office denied Yang’s planned visit.
Lenovo currently outsources the production of its notebooks to Quanta Computer, Compal Electronics and Mitac Technology Corporation (MTC).
|Rumors abound as Asustek is said to be interested in acquiring Clevo
Huang Kung Tien, Taipei; Jessie Shen, DigiTimes.com [Wednesday 9 March 2005]
Rumors swirled recently that Asustek Computer would acquire notebook-maker Clevo. However, both companies denied the news.
The rumor follows recent speculation that Asustek will spin-off its OEM notebook unit and focus on its own-brand business. That rumor was denied by company vice chairman TH Tung, though he did admit that Asustek was shifting part of its OEM notebook orders to its 100%-owned subsidiary, Asusalpha Computer, starting in the second quarter.
Clevo is one of the smallest notebook makers in Taiwan and its core-business is barely profitable, but the company does have one of the highest gross margins of any Taiwan notebook maker and it would benefit from the scale that Asustek would bring. However, according to market sources, it is hard to see what Asustek would gain from the relationship. Although Clevo’s design team is quite innovative, the company focuses on the clone market, with most of its customers being small system integrators. So, the company would provide no value for Asustek’s OEM business. The sources added Asustek’s R&D team is also quite mature.
The recent rumors may be a result of the fact that the Taiwan notebook sector is ripe for consolidation, the sources stated. Taiwan notebook vendors have aggressively invested in new capacity over the past few years, which has led to over-expansion in the sector. Notebook vendors are now forced to compete on price to secure OEM orders, which has led to historic lows for their gross margins and profits.
After Quanta Computer’s stock price fell to a record low in January, CEO Michael Wang stated that Taiwan notebook makers needed to discontinue aggressive pricing to grab orders. One month later, rival Compal Electronics grabbed a major order from Dell by undercutting Quanta’s price. Although Dell's decision to give the new orders to Compal came as a surprise to the market – as Quanta has long been Dell's contract maker for notebooks – the sources noted that it makes perfect sense for the major brands to pit the Taiwan makers against each other.
So perhaps joining forces is the only way for Taiwan notebook makers to save themselves from their own price cutting strategies, the sources pointed out. In recent times Compal was rumored to be joining forces with Wistron and when Foxconn (the registered trade name for Hon Hai Precision Industry) first planned to enter the notebook market, it was rumored to be interested in purchasing Arima Computer.
However, all of these merger rumors have come to naught. In addition, instead of consolidation, more players have entered the market, as Foxconn began producing notebooks in the fourth quarter of last year. According to sources, the company has already grabbed major orders from Sony, which had formerly worked with Asustek and Quanta.
|Asustek to officially separate its own-brand and OEM notebook business, to carry out new acquisitions
Emma Wang, Taipei; Steve Shen, DigiTimes.com [Thursday 10 March 2005]
Asustek Computer has decided to officially separate its own-brand and OEM notebook business units and will also aim to solicit OEM orders from the world’s top-five vendors, vice chairman TH Tung said yesterday.
Under the plan, Asustek will shift its OEM notebook orders to its 100%-owned subsidiary, Asusalpha Computer, Tung said.
The separation is to be implemented under the request of its OEM clients who are concerned about conflicts of interest between Asustek’s own-brand and OEM notebook business, Tung stated.
However, Tung noted that Asusalpha will still remain a 100%-owned subsidiary of Asustek, with its revenues and profits to be reflected in Asustek’s consolidated financial report.
Asusalpha, which currently manufactures notebooks Apple Computer, Sony and Samsung Electronics, will position itself as a competitor to other notebook makers such as Quanta Computer, Compal Electronics and Wistron, to win OEM orders from the leading vendors like Dell, Hewlett-Packard (HP) and IBM, Tung indicated.
Asustek will then focus its efforts to promote own-brand and ODM notebook business, Tung said, noting that Asustek is also studying the possibility to outsource part of its notebook production to other contract makers to further bring down its costs.
In addition, Asustek will also carry out new acquisitions to further integrate and strengthen its operations, Tung said.
Details of the company’s acquisition plans will be made public in two weeks, Tung said, noting that the target companies will not be second-tier notebook makers like Clevo as rumors have stated.