Gigabyte has no price cuts planned, unlike Asus
Since Gigabyte already has a firm base in the motherboard channel market and most of the consumers who purchase mid-range or high-end motherboards put quality as their first concern, Ma believes these factors will help counter Asustek’s price cut strategy.
Gigabyte is conservative about its motherboard shipments in 2008 due to falling demand and the new price competition, but will still maintain its original goal of 20 million units, an increase of 4.5% compared to shipments of 19.14 million units in 2007.
Since profits from the company’s OEM motherboard business are low, Gigabyte is continuing to reduce its proportion of total shipments. The brand business currently accounts for 80% of total shipments.
Shipments in July and August did not meet the company’s original expectations, but demand in September has started to recover. Sequential shipment growth in the third quarter will be around 10-15%, stated Ma, adding that he expects shipments in October to be better than in September, and, with Intel set to launch its Core i7 CPUs and X58 chipset in November, sequential shipments growth in the fourth quarter will be around 10%. Graphics card shipments will be around 3.5-4 million units in 2008.
Gigabyte is currently adjusting research and development for its notebook and handset businesses and believes shipments will starting to pick up, noted Ma. He added that combined annual notebook and netbook shipments will total around 200,000 units. The notebook business is expected to tie up any losses in the fourth quarter.