Asus Plans to Reduce Variety of Eee PC Netbooks

Asustek Computer (Asus) plans to offer fewer versions of its Eee PC netbooks this year to avoid confusion and lower production costs, executives said Thursday.

The company, which pioneered the netbook phenomenon with the Eee PC, put out over 20 different versions of the device last year, with different names such as the Eee PC S101, Eee PC 1000H, Eee PC Surf and more.

This year will be different for Asustek. The company will simplify the production and marketing of the Eee PC by reducing the number of models, said CEO Jerry Shen at an investors conference in Taipei on Thursday.

Although last year's Eee PC strategy gave users a much wider range of choices, it did not help Asustek fight off competition from newcomers.

Acer, which launched a single netbook with one name, the Aspire One will likely soon announce that it shipped more netbooks than Asustek did last year, even though Acer entered the netbook market much later in the year than Asustek.

Acer launched the Aspire One in the second half of last year, well behind Asustek, which had Eee PCs on sale from the start of 2008.

Yet on Thursday, Asustek announced it shipped 4.9 million Eee PCs last year, well behind Acer's projected 6 million units. Acer hasn't announced a final shipment figure yet.

Acer's sales of the Aspire One soared due to its simplicity, low cost, and the company's ability to launch globally, analysts say. The company reduced market confusion through its single netbook strategy, and offered variety by letting users choose from different configurations and software.

The strategy also allowed Acer also kept design and assembly costs to a minimum, and Acer passed the savings on to users in the form of low prices.

Asustek, by contrast, suffered due to its strategy of offering multiple Eee PCs. Each run of a line of Eee PCs was more expensive, on average, than Acer's runs of Aspire Ones because the Eee PC models were significantly different, costing Asus in design expenses as well as component procurement and assembly costs, analysts said.

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