Taiwan PC makers woo users with new designs

Companies like Asustek Computer and MiTAC International, traditionally contract producers for other global brands, are now cranking out new designs to win their own share of the lucrative consumer pie.

At Computex, the world's second-largest computer fair, Asustek showcased shiny, colorful laptops that can take pictures from a camera fixed on the top of screens. The notebooks are also equipped with tuners allowing users to watch television. "PCs are moving toward a world that demands more entertainment and digital services, and it's a path that we must follow," Sunny Han, an Asustek marketing director, told Reuters.

Long a powerhouse for computer motherboards, the Taiwan company has aggressively diversified into notebook PCs and cell phones to boost meager sub-contracting margins.

Asustek's new Vento 3600 case for powerful game computers is also grabbing attention as standard PCs fall out of style. The sleek cases look more like a sports car or spaceship than a computer.

Asustek's strategy reflects a wider trend of Taiwan tech companies--contract suppliers to multinationals such as Dell and Hewlett-Packard--toward beefing up their ability to innovate and create their own brands.

Global sales of laptop computers are seen rising more than 25 percent in 2005 from 2004, outpacing the expected 3 percent growth for desktop computers, estimated Jim Wong, head of Acer's IT product business group.

"It will be a good year for mobile products," said the executive from the world's No. 4 PC vendor, which is promoting its latest Ferrari 4000 notebook, a machine coated in carbon-fiber black with the coveted "prancing horse" emblem to target image conscious users.

"Growth of desktops is not high in developed countries but that of laptops is good in developing countries," he said.

While high oil prices, rising global interest rates and a weak U.S. dollar are curbing corporate tech spending this year, computer manufacturers think the consumer turf is still worth exploring as the idea of a one-size-fits-all PC fades.

Taiwan's top electronics components maker, Hon Hai Precision Industry, is selling its "Foxconn"-branded motherboards and oven-size casings to consumers in the clone market who want to build their own powerful computers.

Hon Hai expects sales of Foxconn parts this year to increase seven-fold from 2004 as the do-it-yourself PC market grows.

In the smaller handheld computer market, personal digital assistants (PDAs) are also being sexed up to lure buyers.

MiTAC is making PDAs that allow car drivers to navigate with global positioning system, or GPS, receivers. Its latest PDA not only offers digital maps but also doubles as an MP3 player.

Smaller rival Polstar Technologies exhibited a similar GPS device with bluetooth functions at Computex. "Integrating and innovating technology products is where opportunities come from. New products always have higher contribution to margins," MiTAC President Billy Ho said.

MiTAC launched its first GPS PDA in late 2003 and sells about a third of its GPS products under the "Mio" brand now. Ho said PDA sales will grow by "several times" this year from 2004, after selling 500,000 units globally in the first quarter.

The firm also supplies to electronics distributors such as Medion AG and Typhoon Exploration.

Investors have taken note of MiTAC, pushing its shares to their highest in five years on Tuesday.

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