Microsoft Key Netbook Pioneer Asustek Enters the i

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Netbook Pioneer Asustek Enters the iPad Age Asustek is introducing tablets in response towards the Apple blockbuster but even now sees a future for netbooks. To date, investors aren't convinced
By
Bruce Einhorn and
Tim Culpan

(Corrects the spelling of Asustek inside the headline)
Little computer systems are great to Asustek. The Taiwanese business in 2007 released the first netbook, these low-priced mini-laptops which were the Laptop industry's fastest-growing merchandise for that previous two many years. Netbooks now symbolize almost forty % of the Asus brand's product sales and also have been the main element in supporting Asustek tie Lenovo because the world's No. five transportable Personal computer business, according to researcher Global Information Corp.
Now it looks just like the netbook expansion engine is losing steam. Netbooks' share of the worldwide Computer market place will most likely be flat this year at twelve percent, IDC estimates. As a substitute, buyers are flocking to tablets including Apple's (AAPL) iPad, which supply many of the advantages of netbooks. For Asustek, which means producing a big push into tablets even though attempting to persuade corporations and shoppers that you can find still advantages to netbooks.
On Might 31, Asustek unveiled its initial weapons from the battle versus the iPad: the Eee Pad and also the Eee Tablet. Like Apple's gadget, the Eee Pad—available next winter—will have a touchscreen, an embedded keyboard,Microsoft Office Enterprise 2007, and videoconferencing capability. Unlike the iPad, the Asus machine will sport an Intel (INTC) processor and use the Windows 7 operating system. The Eee Tablet, to hit the market place in early 2011,Office Professional Plus 2010 64 Bit, is an electronic book reader with a touchscreen and built-in camera that allows users to write notes on photos. The new gadgets could be "key drivers for Asustek's product sales and earnings development within the coming a long time," KGI Securities analyst Angela Hsiang wrote in a June 1 report.
Asustek will have plenty of competition, even aside from the iPad. Dell (DELL) has introduced a mini-tablet called the Streak, and almost every other Computer maker has a tablet from the works,Office Home And Student 2010 Key, though some have delayed launches within the wake in the iPad. Whilst the new Asus machines will hit stores before most of the competition, investors clearly have doubts about Asustek's strategy. Its Taipei-listed shares dropped 18 % this 12 months through May 17, when stock income were suspended pending the upcoming spinoff from the company's manufacturing arm. One investor worry is that Asustek can't give as a lot of apps as Apple can. "They have a very good item but the environment is not ready; there's even now not enough content," says Robert Cheng, an analyst in Taipei with Credit Suisse (CS). Another problem is that the Eee Pad will have about six hours of battery life,Office Professional Plus 2010 X86 Key, four hours less than the iPad.
Asustek CEO Jerry Shen believes he still can tap a vast corporate market place for netbooks. The company is tinkering with design, moving away from the current clamshell look to sleeker one-piece models—a kind of tablet shape but with a physical keyboard. Asustek "will have a lot of different types of netbooks that can even now provide a better user experience" than tablets, says Shen.
To hedge in opposition to an enormous decline in netbook popularity, Asustek is heading upscale. In May the firm launched notebooks with Bang & Olufsen sound systems and launched a line of laptops with bamboo on the lid, using 20 % less plastic than other machines. "We even now have a lot of innovation going on," Chairman Jonney Shih says, showing off the private lab adjacent to his office where he retreats to clear his mind by tinkering with Asus gadgets.
One of Asustek's most offbeat innovations is its product-testing strategy. A Buddhist vegetarian, Shih is a supporter with the Tzu Chi Foundation,Microsoft Key, one of Taiwan's biggest Buddhist charities. He enlisted Venerable Dharma Master Cheng Yen, the foundation's 73-year-old founder, to help test e-readers. Cheng Yen "is the best quality assurance," Shih says. "She is so patient." As Asustek tries to match the iPad, he'll need patience from customers, too.
The bottom line: Asustek is working on new tablets as revenue of its mainstay machines, little netbooks, begin to flatten.

Einhorn is Asia regional editor in Bloomberg Businessweek's Hong Kong bureau.
Culpan is a reporter for Bloomberg News
.