Asustek sees netbooks keeping lead over iPad-like devices

IDG News Service - Netbook pioneer Asustek Computer believes its popular Eee PC netbook family will continue to attract more buyers than tablet devices such as Apple's iPad.

The two devices serve different markets, with iPads better for cloud computing and netbooks better for personal computing, said Jerry Shen, CEO of Asustek, during the company's first quarter investors conference in Taipei on Friday.

"The tablet PC is a cloud computing device. If it weren't for Apple this market would develop a lot more slowly," Shen said.

Web-based applications for tablet devices like the iPad tend to store their data in the cloud, whereas netbook users tend to store their applications and data on the device, he said. He believes there's only a small overlap in functionality between the two types of device.

Still, Asustek plans to launch its own Eee Pad tablet PC, at the Computex Taipei 2010 electronics trade show, which runs June 1 to 5.

Asus plans a few versions of the Eee pad. "The first phase will use Microsoft software," Shen said.

But the launch could be delayed if there isn't enough market enthusiasm for tablets at that time, he said.

The company is working on content agreements for the Eee Pad when it launches.

Asustek's revenue rose 73% over last year to NT$80.08 billion ($2.55 billion) in the first quarter, while its net profit rose more than tenfold to NT$4.94 billion.

The company sold 2.5 million laptops in the first quarter and it forecast shipments will rise as much as 10% quarter-on-quarter in the second quarter. Asustek also shipped 1.6 million Eee PC, but said shipments of the popular netbooks will rise as much as 5% in the second quarter.

The company raised its full-year shipment forecast for laptops and Eee PCs this year to 18 million, up 50% over last year and better than the previous target of 16 million.

Shen said component sourcing has been a headache this year, with prices of some key components rising fast and tight supplies in the market. Price increases in DRAM has had the biggest impact on Asustek's business so far, while tight supplies of memory chips and LCD screens have been an issue. Asustek plans to start signing contracts to ensure a stable supply of DRAM at set prices, instead of sourcing from the spot market, Shen said.