Asus and Asustek to split brands

Asus and Asustek to split brands

Asustek, one of the world's largest contract manufacturers, is formulating plans to spin off its brand name division into a separate company, an executive says.

The company is also putting into place a series of measures to make sure its future products, and its manufacturing facilities, are far more environmentally friendly than they are today.

Asustek plans to spin off its brand name operations into a company named Asus, while leaving its current moniker with the contract electronics manufacturing business, says Sunny Han, director of marketing.

Such a split would look a lot like the reorganisation Acer accomplished a few years ago. Under pressure by its contract manufacturing customers to stop competing with them, Acer opted to spin off the business into a separate company, Wistron. The deal freed Acer from the headaches of dealing with its clients while marketing similar products as theirs, and allowed it to choose from a variety of contract manufacturing partners.

Asus would be able to do the same in terms of deciding how to contract out production, says Han. The brand name division currently markets 16 product lines, including laptop computers, mobile phones and LCD TVs.

The company has already made the move with its branded motherboards. It merged its branded motherboard division, including Asus and Asrock motherboards, with that of Giga-Byte Technology. Asustek, which holds 49% of the venture, will continue to create its own designs.

Giga-Byte will also continue to develop and market its own branded motherboards, despite the joint venture. The deal is complicated, but Han sees it as a first step in an eventual Asustek takeover of Giga-Byte's branded motherboard division, which would give Asustek a greater-than-50% share of the global branded motherboard market.

Asustek's R&D lab is also working on ways to make company products far more environmentally sound than they are today, part of its Green Asus initiative.

Every design is critiqued for ways it could be more green, such as figuring out how to use more biodegradable materials and shared parts, and making them easier to recycle, says Markus Wierzoch, design manager at Asustek. One example is the company's switch to use metal in place of plastics and electroplating, which are far worse for the environment.

One of the initiatives the company is delving into is modulation, or making computer system modules so that users can replace parts of their PCs one at a time, instead of the whole system. By using modules, a user could keep their existing chassis, monitor, keyboard, hard drive, DVD burner and other parts, but install a new microprocessor module complete with the latest chip set and memory chips.

Such modules would help reduce waste by allowing users to continue to use good equipment, while upgrading only parts of their PC at a time.

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