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ASUS CEO Resigns as Company Shifts Mobile Focus To Power Users (engadget.com)
Earlier today, ASUS announced that long-time CEO Jerry Shen is stepping down ahead of "a comprehensive corporate transformation" -- part of which involving a new co-CEO structure, as well as a major shift in mobile strategy to focus on gamers and power users. From a report: In other words, we'll be seeing more ROG Phones and maybe fewer ZenFones, which is a way to admit defeat in what ASUS chairman Jonney Shih described as a "bloody battlefield" in his interview with Business Next. During his 11 years serving as CEO, Shen oversaw the launch of the PadFone series, Transformer series, ZenBook series and ZenFone series. Prior to that, Shen was also credited as the main creator of the Eee PC, the small machine that kickstarted the netbook race in 2006.
Apple realized long ago a battle at the low end is one that leaves no victors.
It's a good idea to focus on finding and winning over people who are willing to pay for extra power and features. The other benefit of that approach is you are likely to find more loyal users, if you go chasing after people who ignore specs and value and just chase the cheapest model, they will have zero brand loyalty and may well not purchase your phones again when upgrading.
To win over repeat customers means putting money into design and build that knock you right out of contention at the low end of the market.
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RIM did it for 2 decades and it seemed to work out just fine.
His netbook move was not vain.
I still have one. 32 bits celeron working OK with a small Linux distro. I use it as a calculator for lab related stuff. Back in the day, a Linux compatible portable computer sold for cheap without the Microsoft tax was big news.
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It's a really hard tightrope to walk going after a niche, though, because your sales will be less so it's really important you cut costs. If you end up with lower quality components as a result, then the niche you're targeting will probably ignore your offering and buy one of the other phones that fits their niche well-enough. And if you don't compromise the quality of the components, you need to ensure you don't spend too much on marketing - but then if you don't spend on marketing you may not make the sales required to justify the product, etc.
Vicious circle.
From a computer technician point of view (and my personal opinion) they are SO FUCKING BADLY designed. All the asus laptops that I worked with just took more time for nothing and it felt like all of them could break easily. they material was made cheap.
I mean, just to replace a hard drive was a nightmare imo. I had to remove the entire bottom plate and sometimes the keyboard as well and this is just to replace to access it. Jesus Christ, take a look at the lenovo laptops and at least copy their design to access parts that should take 20 seconds to replace ffs. ()
The Macbooks are (currently) made by Quanta. They're an ODM - original design manufacturer. That's like an OEM, except they also design the product. They're the ones who came up with such innovations like hogging a unibody laptop chassis out of a single solid piece of aluminum, not Apple. Slashdot had an article describing how they bought the CNC milling machinery, were playing around with hogging out aluminum billets, and pitched the idea to Apple. Quanta also makes laptops for pretty much every other laptop brand out there, so no, Apple doesn't have a monopoly on quality. I always tell buyers that about the only thing the brand name tells you is what sort of aftermarket support you'll get.
Asus also started off as an ODM too. They made the old Powerbooks and the plastic Macbooks, as well as a few other Apple devices. They spun off their ODM division as Pegatron (the company founder likes Pegasus - both company names are derived from it) a decade ago due to complaints from their customers about conflict of interest (they also sold laptops under the Asus brand). Likewise, the iPhones are made by Foxconn, which is probably more widely known due to PR managers at Apple dumping blame for all the bad things that happen to iPhones onto Foxconn in order to preserve the Apple brand name.
The only hardware Apple makes is their processor. Everything else is made by other companies. Memory by Samsung and SK Hynix. Flash storage by Samsung and Toshiba. Screen by Samsung and LG, camera by Sony, etc. Apple just hires an ODM and gives them the general design specs they want it to meet. The ODM makes the product, buying parts that are available to all other brand names, and packages them together into a whole. Just like every other brand name. There is no magic unicorn dust inside. Sorry to burst your bubble.
What Apple figured out is the Gucci effect. If you develop a strong brand name, people will pay extra to buy it regardless of features or quality.
The client computer market (think desktop, Laptop, workstation, gamers, ultrabook, etc) is ripe for consolidation. Only Dell, HP Ink and apple, have decent margings there (tow of them because economies of scale, the other because is able to charge a premium for the product, this written on a Macbook Air).
A consolidatation of players is long overdue. In japan, is already happened. NEC sold its client computer arm to Lenovo. Fujitsu separated their PC arm (which itself was the merger of fujitsus and Siemes client computing arm), So did toshiba. Sony divested the Vaio Group (low sales and earnings) and that was acquired by a private equity group which in turn tried to merge the three of them to no avail. Fujistu tired of waiting and flogged the whole thing to Lenovo...
Asus shoud follow suit and merge, perhaps with arch-nemesis Acer. God knows both companies need the economies of scale to make this work.
Failing that, any other of the top 7 companies will do. in the Client PC game, economies of scale are one of the most important factors, and short of Dell, HP and Lenovo, no one has enough economies of scale to do good in that game. Either merge on your own volition, or be absorved after a Chapter 7 , chapter 11 or administration proceedings
Just my two cents.
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The ASUS sub on Reddit is filled with stories detailing horrible customer support. If the new CEO doesnâ(TM)t put some effort into improvements in that area their time selling expensive components to gamers will not last very long.
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Shooting for a niche phone is a really high risk move.
There are strong economy of scale effects from going with the pack. The screen suppliers all have the screen size and type you are after. Components have been certified and specially designed. You can also leverage existing designs to reduce your time to market.
This ties into costs. Component costs are $200 - $300 USD for value to high end phones, this will rapidly increase if you do anything custom. Then add in your design costs and profit, divided across the number of units. Finally double it for the retail price.
So a value phone with some unique outdoor features and form factor designed from scratch probably has to retail for $1000 USD and sell half a million units.
Much better to take a cheap mass produced standard Android design from generic factory 67. Get them to swap out the back panel and put it in a rubberised case. Costs are lower, risks are lower, time to market is much faster. And this is basically what you see if you search for a rugged phone.
I'm considering the Asus ROG phone, Razer Phone 2, and Black Shark Helo for my next phone. Make a landscape slider keyboard addon for the ROG phone and you'll get an instant niche of power user customers - all the people still using Droid 4s, Photon Qs and even Maemo phones like the N900.
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