“Asus will continue to compete with Gigabyte United”

By Vinita Bhatia - 2 December, 2006

Tim Handley still does not have his business card with him, because there has been a spate of corporate changes taking place in Gigabyte ever since it announced it plans to enter into a JV with AsusTek Inc. But Handley has his job cut out for him. He still views Asus as a competitor, which will make him go that extra mile to ramp up sales for Gigabyte United

What were some of the prime reasons for Gigabyte to merge forces with Asus?

For the past two years, Foxconn was trying to buy Gigabyte. The reason was simple. Like most Taiwanese companies, Foxconn business model was to simply manufacture motherboards in bulk to enjoy economies of scale. It did not have any need to market its brand or create its brand identity.

Tim Handley
Regional Marketing Manager-Pan Asia and Pan Africa
Gigabyte United

But China has emerged as the mass producer for the world and this put Foxconn in a fix. It did not have a channel or go-to-market strategy. Also, Foxconn had OEM partnerships and did not sell to the end customer.

On the other hand, Gigabyte had a dedicated and loyal channel and a good branding strategy. Plus 80 percent of Gigabyte's business came from the channel to the end customers. Therefore, Foxconn had been making overtures to take over Gigabyte as the best route to transform itself into a popular brand. There was not much else that Foxconn could have done to upgrade itself into an end-customer brand other than this.

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