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Taiwans Asus stepping out from the shadows

As awards start to pile up, and brand recognition grows, Taiwanese information technology manufacturer ASUSTeK looks to move itself from local player to international dominator.

Sunny Han, the global brand director of ASUS, touts that the company is using a variety of methods to increase its global market share across a variety of products. Integral to this plan, though, is the importance of design.

“Over the past several years, we have increased our output of own brand products. We feel that incorporating more own-brand sales will drive our revenues to USD 12 billion in 2005, up from USD 7.7 billion in 2004,” stated Han.

Grabbing market shares

ASUS already is one of the world’s largest information technology companies, even though many outside of the Asia-Pacific region have not heard of the company.

In 2005, ASUS will be the world’s largest manufacturer of motherboards, grabbing a 35 percent global market share through sales of 52 million units, according to Han.

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Similarly, Han continued, the company owns the number one spot for graphics cards production, as it will ship 10 million units in 2005, and the number five position in notebooks manufactured, with an estimated 4 million sets produced in 2005.

Han indicated that the company increasingly relies on its own brand manufacturing (OBM), especially for notebook computers.

“One year ago, nearly 60 percent of the notebooks we manufactured were on an original design manufacturing (ODM) basis. This year, we’ve increased the number of our own brand units to account for nearly 45 to 47 percent of all notebooks,” stated Han.

The reason in developing a brand is simple own brand sales generate higher profit margins. Han acknowledged that the company enjoys an average profit margin of 10 to 15 percent higher than normal with own brand motherboards, but that number rose even higher, up to 30 percent, for the more expensive models.

Design drives

ASUS has experienced large growth in its sales, much of which can be attributed to an increased focus on design starting nearly 5 years ago. According to Markus Wierzoch, ASUS Design Team, the company currently classifies products into 4 segments: Thinking, Luxury, Living, and Power.

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“Using this classification method allows us to create unique designs that best match the consumers within that segment. While consumers within the Thinking and Power segments both use notebook computers, they are fundamentally after different features in their products,” stated Wierzoch.

According to Wierzoch, the Thinking product line is classified by products that are “gadgety, use new materials, and feature new applications.” The Luxury line was more for high-end consumers looking for fashionable products. The Living segment focuses on products that can best be integrated into the home. The Power segment is targeted for business consumers who search for high-quality.

Yet, Wierzoch indicated, the designs should still maintain somewhat similar features, allowing all of the products across each segment to belong to a large “family” — the ASUS family.

This focus on design has yielded positive results, as the company has won several international design awards, and more importantly, as the brand grows stronger overseas, with sales coming from across the globe.

The European market, driven by a strong market presence in Germany, now accounts for roughly 35 percent of all revenues for ASUS. This is followed by the North American, which generates roughly 30 percent of sales; then the APAC region, accounting for 22 to 25 percent of sales; and finally China, which takes the remaining 10 percent.

Bringing home hardware

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ASUS efforts in design and branding have not gone unnoticed outside of Taiwan as well. ASUS won the largest prize awarded to Taiwanese manufacturers at the 2005 iF Design Awards when it took home a Gold iF Design Award for its W1N Notebook.

The W1N Notebook features a gapless touch pad, hidden hinges, and semi-invisible fast keys. Wierzoch explained the hinges were designed to be part of the frame of the notebook, so as to eliminate the “creaking” sound found when opening and closing the computer.

Similarly, the gapless touch pad was an innovative solution in helping to eliminate dust accumulation that occurs around normal touch pads, while the semi-invisible fast keys provided a clear and distraction-free view of the monitor.

Similarly, on the home front, ASUS plans to build a brand are generating positive returns. In its “2005 Top 10 Global Brands in Taiwan” report, global brand consultancy Interbrand ranked ASUS as having the second highest brand value.

According to Interbrand, the brand value of ASUS is worth USD 882 million. Interbrand stated that ASUS brand value rose 4 percent in 2005 over 2004. ASUS is nearing the USD 1 billion mark in brand value, which would make the company large enough in value to be considered for the Interbrand-BusinessWeek Top 100 Brands list.

ASUSTeK is incorporating the increasingly important aspect of design into its products, allowing the company to quickly establishing its brand across world markets. As brand value grows and awards rack up, look for the company to make its mark on the PC world.
ASUSTeK Computer Inc.

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