Asustek wins Lenovo's orders for Industrial PCs
Apr 24, 2007
The Taiwan-based Asustek Computer Inc., one of the world's leading PC brands, has won orders for industrial PCs (IPCs) from Lenovo of China for the first time, and is also expected to bag Lenovo's orders for notebook PCs soon, according to industry sources.
In recent years, Asustek has built its own brand name for notebook PCs around the world, tapping Chinese market as the fourth-largest PC brand, only behind Dell, HP, and Lenovo. However, in consideration of brand competition, Asustek has yet to conduct any contract production for Lenovo.
With its business operations in motherboards, notebook PCs, and mobile phones flourishing over the past few years, Asustek has also been ambitious to develop the business of servers and IPCs. This made Lenovo, who is seeking an additional supplier, resolve to place orders for IPCs with Asustek, and both sides have also kicked off negotiations on contract production of notebook PCs for Lenovo.
At the moment, Lenovo spends over US$5 billion per year sourcing motherboards from such Taiwan's suppliers as Hong Hai Group, Elite Computer System, and Gigabyte Technology, and notebook PCs from Quanta Computer, Compal Electronics, and Wistron. In case of Asustek squeezing into Lenovo's supply chain of notebook PCs, Lenovo's existing suppliers will be somehow affected.
Asustek ventured into the field of IPCs through establishing a joint venture with another domestic IPC supplier, Advantek, in 2005. Besides, Asustek has also set up its IPC department, serving as an OEM supplier for Advantek's own-brand IPCs as well as for other customers.
On another front, after having acquired IBM's PC department for three years, Lenovo posts shining sales performance merely in the Asia-Pacific region, especially mainland China. However, the brand has seen its shares of the U.S. and the European markets edge down due mainly to fierce competition in the PC segment.
Plus, Lenovo posted shipment of 3.969 million PCs for the first quarter of this year, lower than Asustek's corresponding figure of 4.276 million units, and has retreated to the No. 4 position from its original No. 3 place in the global ranking. This has prompted Lenovo to reinforce its competitiveness by soliciting more OEM suppliers.
source & copyright: CENS