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Motherboard vendors to focus on gross margin in 2015

by Ryan Martin on 28 November 2014, 14:45

Tags: ASUSTeK (TPE:2357), MSI, AsRock, Gigabyte (TPE:2376), ECS, Jetway

Quick Link: HEXUS.net/qacl6f

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If Digitimes are to be believed 2014 was the year of ASUS in the motherboard market. Throughout this year ASUSTeK has been aggressively pricing its entire motherboard range to defend its position as the largest motherboard vendor in the market. This price-cutting has, reportedly, forced many rival brands into adopting a new strategy for 2015.

The report suggests there will be a renewed focus on maintaining gross margins among ASUSTeK's rivals, namely ASRock and MSI, rather than trying to compete for market share with lower pricing and higher shipment volumes. This comes as ASUSTeK's shipments have risen to 22 million for 2014 with most of the increase coming from eating into rival's market share; rather than an increasing motherboard market. Gigabyte has been affected the least by this but so called 'second-tier' vendors, namely ASRock, ECS and MSI, have felt a significant squeeze from the incumbant.

The situation is expected to be further compounded by a continued slow-down of motherboard demand in China next year. Gigabyte is anticipated to continue its focus on pushing its high-end motherboards to deal with declining demand, and profit margins, on lower-end models. Gigabyte's strategy so far has enabled it to maintain a stronger profit margin than ASUSTeK, despite having lower overall shipments. MSI is said to be balancing the decline of its motherboard business with strong growth in its gaming notebook business. ASRock, on the other hand, has no such coping strategy which is worrying given that it "has been impacted the most from the price competition in terms of both shipments and profitability."

China-based motherboard vendors are expected to be the hardest-hit, brands like Colorful, Maxsum and Onda have experienced declining year-on-year profits while smaller brands like Jetway, Jwele, M-One and Topstar could be eliminated from the market entirely, Digitmes reports.



HEXUS Forums :: 3 Comments

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I remember jetway board form the old pentium 2 days but never even herd f the other china-based ones mentioned here.
Plasmastorm
I remember jetway board form the old pentium 2 days but never even herd f the other china-based ones mentioned here.
I had to google to make sure, but my very first motherboard featuring Slot A, SD-11, made by FIC(First International Computers) is Chinese and to my amazement they're still active! Although it seems they are making ARM based development boards now and likely aren't feeling this pressure from Asus or Gigabyte.
But yeah never heard of Jwele or M-One.

Say what you want about Asus, their Motherboards are pretty unmatched, I've tried to switch away from them but I always come back, I'm less impressed with, basically everything else they make, their graphics cards are decent(My two 7970's are perfectly fine), but looking at them in detail I feel MSI is the master when it comes to making top-quality video cards, although they also tend to be slightly more expensive.

I really hope Asrock pulls through though, they are definitely my favorite “interesting” Motherboard maker, compare their ITX FM2+ with anyone else and it's just completely feature packed and has a fairly interesting HDMI switch, or their Rack boards, one of which I'm using in my pfsense router(Asrock E3C226D2I). Maybe they should try their luck with Video cards?
Was really disappointed with Gigabyte and their z97 offerings.