2nd UPDATE: Acer, Asustek to Launch Windows 8 Products in October

Date : 06/04/2012 @ 7:47AM
Source : Dow Jones News
Stock : Microsoft Corp. (MSFT)
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2nd UPDATE: Acer, Asustek to Launch Windows 8 Products in October

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-- Taiwanese personal computer makers Acer and Asustek expect to launch products using Microsoft's Windows 8 operating system in October

-- Acer and Austek unveil Windows 8-based tablets, laptops and desktops that are all touch-screen-capable

(Recasts throughout, adds Asustek's plan to launch Windows 8 devices.)

   By Lorraine Luk 

TAIPEI--Taiwanese personal computer makers Acer Inc. (2353.TW) and Asustek Computer Inc. (2357.TW) said Monday they expect to launch Windows 8-based consumer products in October, as the PC industry pins its hopes for growth on Microsoft Corp.'s (MSFT) next-generation operating system optimized for touch-screen devices.

Both Acer and Asustek unveiled new devices that run on a preview version of Windows 8 a day ahead of Tuesday's official opening of the annual Computex computer industry trade show in Taipei. Their devices--tablets, laptops and desktops--are equipped with touch-capable screens.

Their plans to release touch-enabled Windows 8 devices come as PC makers are counting on the new operating system to help them regain lost ground against Apple Inc. (AAPL). Apple's iPhone and iPad have helped shape the market for mobile Internet devices such as smartphones and tablets, which now represent some of the fastest-growing segments of consumer electronics. The traditional PC market, by contrast, has seen only modest growth in recent years.

"We have high hopes for Windows 8" as a major incentive for people to replace their PCs or buy new tablets, said Asustek Chief Financial Officer David Chang.

Acer Chief Executive J.T. Wang said he expects the company's Windows 8-based products to boost its revenue in the fourth quarter. The products will initially target developed markets and won't try to compete on pricing, as the focus will be on their improved functionality, he said.

In a bid to compete with Apple, several PC makers, including Acer and Asustek, have released thin, lightweight laptop PCs, collectively known as ultrabooks, that use flash memory chips instead of hard drives so the devices can be started up more quickly.

Ultrabook sales so far haven't met the industry's expectations, and PC makers expect Windows 8 to help the still-nascent ultrabook market gain traction. Ultrabooks are expected to account for up to 20% of the notebook PC shipments at Acer this year, and 15% at Asustek, the companies said.

Windows 8 will help bring ultrabooks closer to Apple's Macbook Air, and Acer's Windows 8-based devices look competitive, said Barclays Capital analyst Kirk Yang. Still, for Windows-based ultrabooks to become attractive, their prices have to come down, he added.

Ultrabooks typically cost a few hundred dollars more than conventional laptops. Acer said Monday that its new Windows 8 ultrabooks could be above or below $1,000, depending on specifications and features.

The market for Windows 8 devices is also a battlefield for major computer chip technology firms. In addition to PCs running processors from Intel Corp. (INTC) and Advanced Micro Devices Inc. (AMD), Windows 8 will also power tablets and laptops running low-power processors from U.K.-based ARM Holdings PLC (ARMH), which designs most processors for mobile computing devices. Intel and ARM have been trying to expand into each other's territories, with ARM making more chips for PCs while Intel strengthening its offerings for tablets and smartphones.

Acer said Monday that it will initially focus on Windows 8 devices that run on Intel chips, working within a traditional PC ecosystem that the company is already familiar with. Acer said it expects to launch Windows 8 tablets with ARM processors in the first quarter of next year, but added that it has no plans to use ARM processors for its non-tablet PCs.

Asustek showed a Windows 8 tablet with an ARM processor Monday and said it plans to launch it in the fourth quarter.

--Juro Osawa in Hong Kong contributed to this article.

Write to Lorraine Luk at lorraine.luk@dowjones.com

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