Austek announced Red Flag, a new sub-brand that will focus specifically on the Chinese market. The company will use this new sub-brand to sell entry-level and mid-range motherboards, these boards will be designed specifically for the Chinese market and will differentiate itself from the main ASUS brand with completely different specifications and pricing.
A report by DigiTimes notes Asustek will establish a new team to handle the Red Flag series and points out this strategy and points out that this strategy could greatly impact smaller players like MSI, Biostar, ASRock and Colorful. Furthermore, the site also speculates it could force Gigabyte to rethink its pricing strategy in China.
Asustek Computer and Gigabyte Technology each shipped 17 million motherboards in 2015, and with the exception of ASRock, second-tier and third-tier vendors such as Micro-Star International (MSI), Biostar, Elitegroup Computer Systems (ECS) and Colorful all suffered losses in the motherboard business.
Asustek waged fierce competition against Gigabyte in China and shipped 10 million motherboards in the country in 2015, slightly better than Gigabyte's 9.5 million units. To widen its gap with Gigabyte in China, in addition to continuing its existing promotions and aggressive pricing strategy, Asustek also plans to push Red Flag to take over the mid-range and entry-level segments.