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Why Asustek Lags In Mobile Devices Despite Cool Designs

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Why Asustek Lags In Mobile Devices Despite Cool Designs

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Why Asustek Lags In Mobile Devices Despite Cool Designs

Sales people at Taipei’s biggest consumer electronics mall look miffed when you ask to see the Padfone Mini, one of Asustek Computer’s trendier mobile devices. The smartphone that fits inside a tablet doesn’t stock easily as Asus wholesales us just a few at a time, you might hear. The tool attracts Asustek junkies but not people shopping across brands, one vendor said in late January about three weeks after its release in the developer’s home market Taiwan. Lots of people ask about the Mini to figure out how it works, said another, but far fewer lay down the $394 asking price to take one home.

It’s happening again. Asus, despite a record for well-designed, trend-setting hybrids, ultimately get little attention for mobile devices. Market research Strategy Analytics says Asus will net just 1% of world smartphone shipments this year. What’s up with that?

Company chairman Johnny Shih spends time brainstorming about the next product line. His firm’s engineering claims a solid reputation borne out by upbeat tech media reviews. The developer already ranked as Gartner’s world No. 5 in PC shipments last quarter, taking a 6.5% market share and scoring much of the world gamer market with wide-bodied notebooks spiced up with audio-visual features. In 2007 Asus became the first PC maker to market a netbook, leading a trend in the lightweight laptops that invited today’s tablets.

The Padfone Mini’s Android-based 4.3-inch phone that fits into a 7-inch tablet at an affordable price sounds like a power-on formula.

Yet the 24-year-old developer must rely on its historical staples of motherboards and PCs through this year at least despite the crush to win customers and probably investors by standing out in the faster-growing mobile device market.

Its mobile devices don’t shine for long enough as new products keep hitting shelves on the way to 263 million tablet sales and 1.9 billion smartphones expected this year per Gartner research. The company also lacks distribution for mobile devices, some analysts say. “Asus smartphones are on sale in very few operator stores worldwide, and it is so far hard to tell Asus models apart from the sea of other Android models available on crowded store shelves,” says Neil Mawston, global wireless practice executive director at Strategy Analytics in the United Kingdom.

That’s ironic, because Asustek is often the first wave in that sea with efficient new form factors and applications. But it gets lapped within two quarters by rivals such as Acer and Hewlett-Packard, says Helen Chiang, senior research manager with market research firm IDC in Taipei. Then Asus comes out with a new design, only to find it duplicated by a competitor within a few months, she says. “From a technology point of view, Asustek is leading,” Chiang says. “So to grab the timing is important so you enjoy the market for a quarter or two.”

Asus also lags in business clients who would make lucrative bulk orders, leaving much of that revenue potential to its peers, Chiang adds. “They’re taking measures to sell smartphones, but that’s for the long term,” she says. “In the short term they’ve got to lean on PCs.”

PC shipments fell 8.4% globally last year, but the slide may have finally bottomed out in core markets, Gartner says. Desktopfone, anyone?

Source: Forbes


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