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UPDATE 1-TECHSHOW-Asustek sees strong growth amid economy worry

Mon Jan 7, 2008 5:38pm EST

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By Scott Hillis

LAS VEGAS, Jan 7 (Reuters) - Taiwanese personal computer maker Asustek Computer Inc (2357.TW) is getting worried about the U.S. economy but maintaining an "aggressive" growth plan, Chief Executive Jonney Shih said on Monday.

"We watch very carefully these kind of general economy issues, and we do feel more and more concerned about the subprime issue and the impact on consumer spending and corporate spending," Shih told Reuters.

The PC industry enjoyed stronger-than-expected growth of about 12 percent last year, but many worry that a wave of defaults on high risk, or "subprime," home loans will cause U.S. consumers to spend less on televisions, computers and other electronics.

Shih said broad economic problems and component shortages might crimp PC growth this year, though they could be offset by positive factors such as more enthusiastic adoption of Microsoft Corp's (MSFT.O) Windows Vista operating system.

"But we emphasize more relative competitive advantage, so in the past we've still grown very aggressively," Shih said. "We still plan on a very aggressive growth goal" for the year.

Shih spoke at the annual Consumer Electronics Show in Las Vegas, the world's premier event for hardware makers to show off their latest wares.

Asustek, traditionally a maker of computer components and a manufacturer of PCs sold under other brands, has been pushing its own line of laptop computers and other electronics and has set its sights on the United States as a big growth market.

The company said at CES that it plans to sell a high-end cell phone in the United States this year, and introduced a laptop with one terabyte of hard disk space. A terabyte is 1,000 gigabytes, or enough to store, say, a quarter-million songs.

At the other end of its product lineup is the Eee PC, a subcompact notebook that sells for about $400 and is aimed at children, travelers, non-technical users and emerging markets.

Shih said Asustek had sold 350,000 of the machines since they went on sale last October, and the company was sticking to its goal of selling 5 million units this year.

"This is one of the most successful products we have developed," Shih said. "For every country we have launched in, it has had very high acceptance." (Reporting by Scott Hillis; editing by Jeffrey Benkoe and Braden Reddall)



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