Asustek Computer has announced results of its operations in Q4 2014. The company remained the world’s No. 1 supplier of PC motherboards and also significantly increased sales of other branded products. But the company will likely face a number of challenges in 2015.
Asustek sold 22 million branded mainboards for the channel/DIY [do it yourself] markets in 2014, an increase of 6.3 per cent year-over-year, according to a report from DigiTimes web-site. The company also sold 20.1 million notebooks, 6.9 per cent more than in 2013. In addition, Asus also sold two million desktops, around 9.4 million tablets and over eight million smartphones.
While Asustek has managed to meet its mainboards sales targets in 2014, to do so it had to offer more affordable solutions than it traditionally does. Asustek’s arch-rival Gigabyte Technology also had to lower prices and even kick off a “buy one, get one free” kind of promo campaign, which is called “Take One Get Two”, in order to improve sales of high-end motherboards. In late November, 2014, it was reported that leading mainboard makers would reconsider their strategies for 2015 and would cease to cut prices in a bid to boost sales.
Since Asus sells loads of premium laptops, graphics cards, tablets as well as gradually increasing sales of expensive desktops, it is possible for the company to focus on the high-end of the mainboards market and even sacrifice its market share for the sake of profitability. It should be noted that smartphones remain rather low-profitable business for the company, but Asus so far has made no announcements regarding plans to boost profitability of its handset unit.
It should be noted that due to delays of the code-named Intel Corp.’s “Broadwell” microprocessors and their co-existence with “Skylake” chips on the market, this year there will be around five types of platforms for Intel’s desktop central processing units. For makers of motherboards this means increased costs and internal competition. As a result, focus on maintaining profitability is very important for survival.
In the recent quarters, Asus introduced a number of all-new products that could potentially boost its profitability. Asustek’s premium Strix lineup of graphics cards and gaming gear is sold with a significant premium compared to other offerings and the company will continue to popularize the family. In addition, Asustek seems to be getting more serious about selling monitors for gamers, which is also likely to be a profitable business.
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KitGuru Says: Makers of mainboards will face a lot of challenges this year. Five Intel-based desktop platforms as well as a lack of almost any new desktop CPU/APU products from AMD represent only a part of their set of problems. What is important is that Intel’s chips are not expected to offer significantly higher performance compared to existing solutions. Consequently, sales of new desktop platforms among performance enthusiasts will hardly be significantly higher compared to sales in 2014. As a result, graphics cards may gain importance for mainboard suppliers, especially keeping in mind that both AMD and Nvidia Corp. are on-track to announce new high-end products this year.