Browse Problems
Browse the BusinessWeek Archive
Netbook Pioneer Asustek Enters the iPad Age Asustek is introducing tablets in response towards the Apple blockbuster but still sees a future for netbooks. So far, investors aren't convinced
By
Bruce Einhorn and
Tim Culpan
(Corrects the spelling of Asustek inside the headline)
Tiny computers are excellent to Asustek. The Taiwanese firm in 2007 introduced the first netbook, people low-priced mini-laptops that have been the Laptop industry's fastest-growing product for the past two years. Netbooks now signify almost 40 percent in the Asus brand's revenue and have been the key aspect in aiding Asustek tie Lenovo since the world's No. 5 portable Laptop business, according to researcher Worldwide Data Corp.
Now it seems to be just like the netbook progress engine is dropping steam. Netbooks' reveal with the global Personal computer marketplace will almost certainly be flat this year at 12 percent, IDC estimates. Rather, customers are flocking to tablets for example Apple's (AAPL) iPad, which provide a lot of the advantages of netbooks. For Asustek, which means making an enormous push into tablets although attempting to persuade corporations and customers that there are nevertheless benefits to netbooks.
On May well 31, Asustek unveiled its initial weapons from the battle towards the iPad: the Eee Pad and the Eee Tablet. Like Apple's device,
Microsoft Windows 7, the Eee Pad—available next winter—will have a touchscreen, an embedded keyboard, and videoconferencing capability. Unlike the iPad,
Cheap Office Professional Plus 2007, 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, 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, even aside from the iPad. Dell (DELL) has released a mini-tablet called the Streak, and almost every other Laptop maker has a tablet from the works, though some have delayed launches inside the wake in the iPad. While the new Asus machines will hit stores before most from the competition, investors clearly have doubts about Asustek's strategy. Its Taipei-listed shares dropped 18 percent this year through May possibly 17, when stock product sales were suspended pending the upcoming spinoff in the company's manufacturing arm. One investor worry is that Asustek can't give as many apps as Apple can. "They have a very very good product 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 market place for netbooks. The business 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 even now provide a better user experience" than tablets, says Shen.
To hedge versus a large decline in netbook popularity, Asustek is heading upscale. In May possibly the organization launched notebooks with Bang & Olufsen sound systems and introduced 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,
Office Standard 2010 Product Key, 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,
Office Home And Business 2010 X86, Shih is a supporter with 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," Shih says. "She is so patient." As Asustek tries to match the iPad, he'll need patience from customers,
Buy Office 2010, too.
The bottom line: Asustek is working on new tablets as product sales of its mainstay machines, little netbooks, begin to flatten.
Einhorn is Asia regional editor in Bloomberg Businessweek's Hong Kong bureau.
Culpan is a reporter for Bloomberg News
.