Asian PC Makers Turn to U.S. Consumers For Growth
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Asian computer makers including Lenovo and Asustek Computer are finding growth prospects in an unlikely place: the United States, a mature, slowing market compared to other regions.
By planning to offer pocket-sized, full-featured notebooks or stylish high-end machines with advanced features, the Asians will target high-growth niches, while steering clear of the broader market dominated by U.S. heavyweights Hewlett-Packard, Dell and Apple.
"You can't afford not to be in the U.S.," said David Daoud, a PC industry analyst at market researcher IDC. "The best way to get into the U.S. is to have something unique, something different."
The push comes as the U.S. lags the rest of the world in PC shipment growth. While Asian companies may have a tough time competing broadly in a saturated market, the laptop segment is still growing.
PC shipments increased 5.2 percent in the United States in the third quarter but were up 15.5 percent worldwide, with some of the fastest growth in the Asia-Pacific region.
Lenovo, the Chinese computer maker that bought IBM's PC business in 2005 will announce its entry into the U.S. consumer PC market at the Consumer Electronics Show (CES), the industry's largest U.S. trade show, in Las Vegas, during the second week of January.
In the U.S., Lenovo sells IBM's ThinkPad laptops to business customers but has not targeted U.S. consumers until now.
Meanwhile, Japan's Toshiba, long a laptop leader in the U.S., continues to post healthy growth of nearly 17 percent, according to IDC's third-quarter report.
Toshiba ranks No. 4 in the U.S. behind Dell, HP and Apple. It plans to refresh its own line of high-end multimedia, tablet and ultra-thin notebook products at CES.
Asustek and Acer also plan to showcase new products at the event. Acer, the world's fourth-largest PC maker, sells through Wal-Mart and Office Depot, among various major U.S. retailers, and in October it bought Irvine, California-based Gateway to expand in the United States.
Even with advanced features and hip styling, Asian PC makers face tough competition from HP, Dell and Apple, who are marketing more innovative laptop computers. These machines include built-in gaming or video cameras as well as longer battery life and lighter-weight materials.
"They have to showcase their products as being some of the best, as opposed to being entry level," IDC's Daoud said. "The best way to do it is through niche and innovation and new products. Otherwise, forget it. The mass PC market is very tough."
Lenovo, Acer, and Asustek are pushing into the U.S. consumer market amid surging popularity of laptops, an area in which they have innovated more than some U.S. competitors such as Dell, which for years has focused more on selling desktop machines and business server computers to companies.
Lenovo, Asustek and others have declined to give details of the products to be unveiled at the Las Vegas show.
Asian companies already make most of the world's laptop computers on a contract basis, so expanding in the U.S. may be logical and cost effective, Daoud said. Taiwan's Quanta Computer, for example, makes laptops for Dell, HP and Apple.
Asian PC makers also need to boost their brands in the U.S. to be considered global players.
"It's still the biggest market for technology," said Rob Enderle, principal analyst at market researcher Enderle Group. "While China is the fastest-growing market, there's something to be said for being in the biggest."
Computer makers sold 37 percent more laptops in the third quarter, helping fuel projected 2007 worldwide PC shipment growth of 14.6 percent, according to IDC.
In the U.S., desktop PC shipments fell an estimated 3 percent in 2007, while notebooks surged an estimated 21 percent.