Asus may have made a name for itself in the U.S. by making netbooks, a category which Apple (s aapl) doesn’t seem to want to touch with a 10-foot pole, but that isn’t stopping Asustek’s vice chairman from talking some major smack. In an interview with The New York Times’ Ashley Vance, Vice Chairman Jonathan Tsang said that Asus has set its sights too low in the past, and that it now wants to take on bigger fish — like Apple.
Mr. Tsang didn’t convey this in any uncertain terms. In fact, his exact words were ,“Our goal is to provide products that are better than Apple’s,” which I think makes things pretty clear. But how does it plan to do that? Well, by first being better than Wii in the gaming market, and better than Kindle in the e-reader segment, of course. It’s actually already developed a system which Tsang says “rivals” the Wii, but content (i.e., games) isn’t forthcoming — which is sort of crucial when you’re trying to field a game console.
As to how Asustek wants to beat Apple at its own game, details are sparse. The company does spend an awful lot of capital on engineering, but up till now, that seems to have mostly gone into infinitely refining and extending its Eee line of budget computer products. The problem for the company, as I see it, is twofold. Most importantly, it isn’t a software company in the same way that Apple is regarding OS X. It doesn’t build operating systems, and to a large extent, it can only be as good as Microsoft (s msft) allows it to be. Second, its business model seems to depend heavily on having many products in many categories, rather than doing a few products extremely well, as is Apple’s model.
Asus will also be entering the smartphone market later this year with partner Garmin (s grmn), which will put it in direct competition with another wildly successful Apple product, the iPhone. Now that the iPhone finally supports turn-by-turn navigation, I’m not so sure Garmin will have quite the selling power it once might’ve, so Asus will yet again have to make up ground from a fairly disadvantaged position.
The whole thing seems like a case of completely ridiculous corporate posturing, but I’m interested in how it plays out, because the companies seem to have opposite business strategies for dealing with tough economic times. Apple basically refuses to go down market, barring the price drops it introduced yesterday, which help a little. Asus, on the other hand, spawned the race to the pricing bottom that led to the overwhelming success of companies like Acer.
It’s a battle to determine the how and why of our computer hardware, and it will take on greater significance as we come to terms with the new economic realities currently taking shape. A company like Asus claiming to want to take on an industry leader like Apple may seem like a ridiculous boast, but it could actually be a telling indication of where the real competition for our computing dollar will lie in the not-so-distant future.