Skip to main content

How will $200 netbooks affect the PC industry?

ASUSTek is planning on making life harder for many PC makers.

The Taiwanese manufacturer of motherboards and PCs recently announced earnings (it’s shares are publicly traded in Taiwan and on the pink sheets in the US and on several other foreign stock exchanges). CEO Jerry Shen held a conference call to discuss the financials and also spent some time covering company expectations for the world-wide notebook market and what ASUSTek’s share might be.

Shen expects his annual notebook shipments growth in 2009 to be higher than the industry's growth of 10-20%. The company also expects to grab a 30% share in the netbook market in 2009 – shipments of 6-7.5 million units out of an estimated 2009 netbook market scale of 20-25 million units.

Shen detailed that the company has adjusted its mid-range and entry-level Eee PC's pricing and market position, and expects to launch an Eee PC priced at US$200 in 2009.

Consumers may love this but other PC manufacturers will find themselves under price pressure.

Without even having to face this kind of price competition yet, we already see Dell responding to recession fears by freezing hiring and embarking on a serious cost cutting initiative. There is talk they are trying to sell their manufacturing facilities.

HP will not escape either. The casual user will be sorely tempted to pass by the high-end PCs from HP when they can get a simple netbook that will serve their basic needs at a minimal price.

Even Intel will feel the effects as netbooks tend to use less powerful microprocessors that yield smaller margins. We have already seen evidence of this in their most recent earnings report as netbooks turned out to be one of the PC segments still showing significant growth even during this economic downturn.

Dell and HP may continue to own the enterprise market where reliability is a top concern and there is more of a need for powerful PCs for various kinds of number-crunching and analysis tasks. Indeed, ASUS will need to prove their products offer the kind of quality U.S. customers have come to expect. Nevertheless, at such a low price point, there should be no shortage of consumers willing to try a product from ASUS. As a matter of fact, it seems like a good choice for Walmart to sell.

One thing is clear. It's going to be harder to make a buck in the PC business. No wonder IBM sold their PC business to Lenovo.

Disclosure: none

Comments

Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation

Thursday Bounce: Trend Busters, Swing Signals and Trend Leaders for July 9, 2009

This is a quick post to announce that we have published Thursday's Trend Leaders, Swing Signals and Trend Busters at Alert HQ . All are based on daily data. Today we have the following: 72 Swing Signals -- A couple of days ago we had 35 signals, today we have twice as many. Happily, we now have 65 BUY signals, a mere 4 SELL Signals plus 3 Strong BUYs. Whoo-hoo! 56 Trend Leaders , all in strong up-trends according to Aroon, MACD and DMI. There are 18 new stocks that made today's list and 60 that fell off Tuesday's list. 48 Trend Busters of which 5 are BUY signals and 43 are SELL signals The view from Alert HQ -- Talk about mixed signals. If you look at our Swing Signals list you would think the market was in the middle of a big bounce. BUY signals are swamping the SELL signals and we even have a few Strong BUYs. Yes, there's a good sprinkling of tech stocks and tech ETFs but the distribution is pretty broad-based with a good number of different sectors represented, eve

Trade Radar gets another update

Some of our data sources changed again and it impacted our ability to load fundamental/financial data. In response, we are rolling out a new version of the software: 7.1.24 The data sourcing issues are fixed and some dead links in the Chart menu were removed. So whether you are a registered user or someone engaged in the free trial, head over to our update page and download the latest version. The update page is here:   https://tradingstockalerts.com/software/downloadpatch Contact us if you have questions or identify any new issues.