Asus plans to leapfrog Dell into PC top three

 

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Posted on 26 May 2009 at 14:42

Netbook PC pioneer Asus aims to double its market share to become the world's number three laptop vendor by 2011.

Asus is currently fifth in the world; Acer and HP occupy the first and second positions respectively. A jump into third place would require Asus to overtake Dell, the one-time market leader.

Asus pioneered the wildly successful low-cost netbook PC in 2007, but has been gradually losing market share as other brands enter the market, and as it grapples with a reorganisation following its fourth-quarter loss last year.

Asus will be introducing five new laptop models based on Intel's consumer ultra-low voltage chip (CULV) this year, as part of its strategy to grow market share.

"We call it the three-three policy, to be ranked third by market share in 2011," says Asus chief executive Jerry Shen. "Our current market share is about 5%, and it would have to be about 10% to become number three."

Shen gave a similarly bullish outlook for the company's prospects in China, where he expects to be on par with second-ranked HP by market share in 2010.

"We don't think Asus can take first place in China, but to be on equal footing with the current number two player should be possible next year in the laptop PC segment," Shen claims.

Asus and crosstown rival Acer now share fifth place in China by market share, according to research firm IDC. Both companies were included in a list of approved brands under a Chinese stimulus package that allows them to sell computers on the mainland.

The two Taiwanese rivals had previously faced considerable headwinds competing in China, which is dominated by home-grown brands such as Lenovo and Founder.

Eee PC boost

Shipments to the United States have increased multi-fold because of the growing popularity of the company's Eee PC line of netbooks.

Demand in Europe, which provides the largest share of the company's revenue, is sluggish, as consumers cut back on their spending.

"In the United States, we're shipping as many computers monthly as we used to annually," says Shen, who became Asus's CEO last year. "But Europe isn't growing at all."

Asus is in the midst of a reorganisation following its fourth-quarter loss in 2008, which it blamed largely on inventory write-offs and foreign-exchange related losses.

Shen says the company will implement a new policy from 2010 where employees who are placed in the worst-performing 5% for two straight years will be asked to go, as part of the company's efforts to streamline operations.

"The number will be higher than 5% this year because of the changes we are making internally, but that's what we're looking at from next year onwards," Shen claims.

Shen says the company should be able to turn in an operating profit in the third quarter, saying it has the necessary measures to return to profitability.

"It's actually a very conservative forecast, and in situations like this, it's better to be conservative and be able to meet the forecast than bullish and miss it," he says.

The company announced a surprise first-quarter profit late last month despite an operating loss, largely due to earnings at its fully-owned subsidiaries and one-time foreign-exchange related gains.

Author: Reuters