Interview with Asus about the Eee PC

Q: The Eee PC only contributes a limited amount to gross margin, how is that going to affect Asustek's overall performance?

A (Tseng): The Eee PC is an extra profit line for Asustek, therefore the low gross margin will not be a problem since the company's main growth driver in terms of our branded product lines is still the notebook. The Eee PC is not targeting consumers who want to buy regular use PC, but rather those looking for a secondary PC and so the product simply represents a supplementary revenue stream for us.

Q: The low gross margin of low-price PCs is one of the market's concerns, if the Eee PC does not have outstanding growth in future shipments it could bring pressure to Asustek. Do you think the Eee PC has a chance to account for 20% of the total worldwide PC shipments in 2010?

A (Shih): We should be able to calculate this after a month or two of sales, but I think the chance of surpassing 20% in 2010 is very high because there will be further products in the future. Traditional PCs are too powerful, no matter in the home or office, we are seeing quad-core rising with octo-core coming in the near future, and the more cores in a CPU the more memory the system needs. Is all this really necessary? With the Eee PC we decided to go back to basics, to bring the focus to just functions and reasonable price levels.