A number of Taiwanese computer manufacturers have started low-cost PC production lines in a bid to tap into the new niche market, but industry watchers said the prospects for the sector may not be as rosy as they seem.
"Low-cost computers, along with desktops and notebook computers, will become the three most important product segments in the future of the PC industry," said Jerry Shen (沈振來), a deputy general manager at Asustek Computer Inc (華碩電腦), at an investor conference last Monday.
Asustek, the world's largest motherboard maker, is set to produce its first batch of budget PCs running on Intel Corp's Classmate PC platform in July, which consist of a low-cost PC design and chips that support a wireless Internet connection.
PHOTO: AP
The company will contract manufacture the PCs for Intel, as well as making them for its own Asus brand.
Total Classmate PC shipments are set to hit 10 million units next year and those made by Asustek will account for as many as 5 million, Shen said.
In July, he said Asustek will roll out four own-brand budget PCs -- tentatively called Easy PCs -- with price tags ranging from US$249 to US$549.
The machines will employ Intel's Solid State Disk with flash memory from 1 gigabyte to 40 gigabytes, instead of the standard mechanical hard drive. And the 7-inch panels will be sourced from AU Optronics Corp (友達光電), Asustek said.
Elitegroup Computer Systems Co (精英電腦), another of the nation's first-tier motherboard makers, will also manufacture contract Classmate PCs, with shipments expected to start in the third quarter, mainly to the Chinese market.
"The low-cost PC sector will enable Taiwanese computer makers to secure market share, judging from the large volumes expected to be produced each year," said Sean Ryan (蕭文良), a researcher with Fubon Securities Investment Services Co (富邦證券投顧).
But it doesn't mean that all the players would secure a solid foothold in the market by rushing into production, he added.
Only those with economies of scale and excellent control of their supply chain would survive and take a controlling share of the market, he said.
For Quanta Computer Inc (廣達電腦), the world's largest contract notebook computer maker, the One Laptop per Child (OLPC) project will only strengthen its market leadership.
Quanta announced on April 26 a delay in shipments until the fourth quarter from the third quarter, caused by changes to components, including a faster central processing unit and a larger hard drive and memory, it said.
The OLPCs will cost US$175 per machine, with Quanta taking a profit of US$3 per machine, Nicholas Negroponte, the former director of the Massachusetts Institute of Technology Media Lab who now heads the nonprofit OLPC, said last month.
The profit is less than what Quanta receives from its mainstream PC business, but it would still be a lucrative unit if the first-year shipments reached 10 million as projected.
But industry watchers remained skeptical on whether these low-cost projects would really take off.
Some of the countries importing the PCs want to have an OLPC assembly line set up within their borders, to create local jobs, said an analyst who requested anonymity.
Managing sales channels for the PCs would be another challenge, he said.
"The distribution of budget computers will not be via conventional distributors or resellers. It will involve the government or large domestic enterprises, which is a totally different ball game," he said.
Despite the hype, Quanta's smaller rival, Compal Electronics Inc (仁寶電腦), has decided to pass on low-cost PCs.
"Low-cost notebook computers are not our focus," Compal spokesman Gary Lu (呂清雄) said.
The average price of portable computers has been on a downward trend over the past few years, and has now fallen to a comfortable level for most consumers, he said.
"Children in these countries are waiting to fill up their stomach, not play computers," he said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS