HP Reportedly Threatens Partners Against Working with Asustek Computer

HP Warns Its Manufacturing Partners Against Working with Asus

by Anton Shilov
10/15/2008 | 11:22 AM

In an attempt not to let Asustek Computer to become the world’s fourth largest notebook vendor worldwide, Hewlett Packard reportedly threatened its manufacturing partners with reduction of orders if they also make systems for Asus. If the information is correct, the scandal may be outrageous.

 

Asustek Computer reportedly set an aim to become the fourth largest notebook vendor worldwide in 2009, on which HP allegedly sent out a notice to its partners demanding they not accept orders from Asustek, and threatening that if anyone violates the demand, the company will penalize the maker by reducing its own outsourcing volume, DigiTimes web-site reported citing sources among contract manufacturers of mobile computers.

HP is currently the world’s No. 1 maker of personal computers. According to Gartner, HP shipped 14.784 million of personal computers in Q3 2008 and commanded 18.4% of the market. Given that Asus does not have large market share globally, it is not a direct rival of HP. In fact, it would be more logical for the PC giant to attack Acer or Lenovo, who are among the top notebook vendors and also compete against HP on the desktop market.

But it will not be easy for HP to undermine businesses of Acer (No. 3) and Lenovo (No. 4), who control 12.5% and 7.3% of the market, respectively. Meanwhile, market share of Asus is less than Toshiba’s (No. 5) 4.6% and it would be much easier for HP to weaken Asustek’s positions and steal some sales to boost its own revenue.

If the information proves to be correct, this may inspire a legal dispute between HP and Asustek, which may as aggressive as the litigation between Advanced Micro Devices and Intel Corp.

Neither Asustek Computer nor HP commented on the news-story.