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EXCLUSIVE: Questions Raised About Consumer Risk & Lack of Local ASUS Subsidiary

Asustek Computer (ASUS) who last month used a major event in Sydney to brag about their “dominant” position in the PC market and their expansion in Australia appears to have no local subsidiary, but instead are operating via a Taiwanese entity.

The Company used a major event in Sydney last month to brag about how they were investing in Australia and how they viewed the Australian market as an “affluent” market that they “needed to be in”.

At an event in Sydney to launch its new ZenBook laptop series, and celebrate the company’s 30th anniversary they claimed at the time to be the fastest-growing notebook brand in Australia.

The event was arranged to launch the Companies ZenBook Duo with Intel’s 10th generation CPU, the new dual-display ZenBook Pro Duo, new ZenBooks with second-gen touchpad displays, and a special white leather-wrapped Anniversary Edition ZenBook.

They also rolled out several YouTube celebs, including Ozzy Man (of ‘Ozzy Man Reviews’ fame) and Californian tech vlogger Austin Evans who appeared to be happy that he got an all expenses paid trip down under.Late last week the Company reported that global sales were under pressure and that that they now expect to post a decrease in sales globally.

The fall in sales comes as questions are raised about the Companies Australian operation or rather the lack of a local subsidiary.

According to their web site consumers who buy their products are actually buying from ASUSTeK Computer Inc (“ASUS”) a Taiwanese based Company after the Australian operation was placed into liquidation late in 2013.

Asustek Computer (AUST) PTY Limited stopped trading in 2014 and was ‘deregistered on 6/2/2014 even Asustek Australia was cancelled.

The Company who does the bulk of their trading via Synnex a Melbourne based distributor has not explained what risks a consumer is taking dealing with a Taiwanese based Company who appears not to have a local entity registered via the Australian Securities and Investment Commission.

An ACC spokesperson said, ‘No matter where in the world a company has its headquarters, if it is selling to Australian consumers, the Australian Consumer Law applies”.

In April 2018, the High Court case rejecting special leave by US-based Valve Corporation against a previous judgement of the Full Federal Court which upheld a finding that Valve had breached Australian Consumer Law when selling to Australian users (and ordered the company to pay a penalty of $3m)

This appears to confirm the ACCC’s view that overseas-based companies selling to Australian consumers must abide by our laws and despite being a Taiwanese listed trader in Australia ASUS customers could act locally against the Company who is currently trying to get traction in the Australian consumer market with a $4,999 high end notebook.

Last week the Company announced that they expect to post flat growth or an up to 5% sequential decrease in PC sales in the fourth quarter, while sales of its component products including motherboards and graphics cards will drop 5% on quarter.

Asustek claims that they are still optimistic about its operation in the medium to long term, expecting revenues and profitability for the next few quarters.

Asustek revenues are down 6% for the year with gross margin rising 3.6% year on year to 15.3% as the Company attempts to enter the Australian premium PC market, while also trying to take on Acer and Dell’s Alienware in the high margin PC gaming market.

The move to new premium products saw net profit from their PC gaming business climb 17%

Although growth for the gaming market has weakened in 2019 with overall shipments expected to only rise around 9% on year, the company’s combined gaming notebook shipments in the first three quarters of 2019 still grew 17% on year, helping the company to obtain a 15% share in the gaming notebook market.

Five-year s ago as PC gaming was starting to come back Alienware was the #1 PC gaming machine, today it’s Acer that is scooping up market share to the extent that the Taiwanese Company is looking at 50% growth in demand for their popular Predator gaming machines in 2019.

According to Acer’s Asia Pacific President Andrew Hou it will be Predator gaming machines and a new generation of premium wafer-thin notebooks that will deliver the growth.

ASUS said it is set to achieve a 15-20% growth from the gaming business in 2020 by releasing competitive products.

In the first nine months of 2019, 58% of Asustek’s notebook shipments were ultra-thin models.

Asustek also recently established a new business group for smart IoT applications. The department has already formed cooperation with hospitals for a smart medical care platform and with governments for smart city projects.

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