Asustek Computer has implemented a new business strategy to improve its profitability by focusing on high-margin orders and markets for higher product ASPs, according to some market watchers.
Prior to its business reform which started in June 2017, Asustek had seen decclines in demand for its products. In order to rejuvenate its business, the vendor has adopted a new strategy to avoid price wars.
The new strategy has started to show results, and the market watchers expect Asustek's sales to see a significant rebound in the fourth quarter of 2017 and become stable in the first half of 2018.
As for the third quarter of 2017, the observers expect Asustek's revenues to grow 15-20% sequentially.
Asustek's net profits in the second quarter of 2017 were halved from the same quarter a year ago and reached only NT$2.01 billion (US$68.14 million) with EPS at NT$2.70, the lowest quarterly performances since the fourth quarter of 2010. The declines were due to ZenFone 4 series' delayed launch and weakening notebook sales.
In addition to re-organizing its product lineup, the reform launched in June also aims to improve its personnel efficiency to enhance its cost structure.
Asustek is expected to ship only around 18 million notebooks in 2017, fewer than the volumes in the previous years, but the company's gross margin is expected to rise to the past as most of the shipments are mid-range to high-end gaming models, 2-in-1 and ultra-thin devices.
Although Asustek has not been able to achieve shipment growths it had expected in some Asia Pacific areas, such as China and India, the Taiwan-based player still has achieved impressive results in Europe as well as Latin America countries such as Peru, Colombia and Chile.
Asustek's ZenFone 4 series smartphones have begun mass shipments in Southeast Asia and Europe in September and their sales are expected to peak in October-November. |