Gigabyte Calls It Quits on ASUS Alliance
March 25, 2007 10:47 AM
All deals are off between ASUS and Gigabyte
If you can't beat 'em, join 'em ... then try to beat 'em again
Gigabyte made top headlines in the fall of last year when it announced
a partnership with long-time rival ASUS
. In the partnership, it was decided that a new joint company would be formed and that Gigabyte would own a 51% stake in the venture while ASUS takes on the remaining 49%. Both companies officially announced the partnership on December 7th,
calling the new company Gigabyte United
What interested most industry analysts were both the possibilities and ramifications of a partnership between the two large conglomerates. No details had been revealed at the time of how the partnership would affect sales and manufacturing, or when and where a particular brand would be used.
This week during a press conference in Taiwan the joint venture between ASUS and Gigabyte was officially dissolved. Both companies this week announced that the partnership in Gigabyte United was no longer, and while the branding and company would still be there, the two companies would no longer keep the partnership.
had the opportunity to sit down with Tomas Lee, marketing manager for Gigabyte, and ask a few questions concerning the direction and future of Gigabyte United.
According to Lee, many thought that ASUS was the one that pulled out of the partnership, but in fact it was Gigabyte that decided to call off the partnership. "ASUS really wanted this alliance but it's us that's pulling out. I think ultimately this will benefit Gigabyte in the long run," said Lee. It appears that Gigabyte analyzed its situation in the partnership, and came to the conclusion its stock would be affected negatively and that its motherboard and VGA business would have long term drawbacks with a 49% ownership by ASUS. "Gigabyte would have 49% less revenue from motherboard and VGA sales. For the amount that ASUS invested in, it didn't seem justified," said Lee.
ASUS commented briefly on Gigabyte's decision and said that it respects it. Some
reports claimed that ASUS would not be paying any penalties
for breaking off the agreement, but as Lee indicated, ASUS was the one who preferred to keep the relationship going. For the long term, it is very possible that the two companies may cooperate again, but for now both will operate independently of each other. "We tried to keep the news to a minimum. We aren't talking to each other at the moment," said Lee.
Lee mentioned to
that the two companies will continue to compete with each other like they have always been doing. In fact, Lee mentioned that it believes the right decision was made, allowing it to compete head on with ASUS in the channel.
"We broke the relationship. Why should we sell half of our business to ASUS for that little money? Potentially, we can take on ASUS in the channel business," expressed Lee.
Clearly Gigabyte feels that it will gain a lot more competing with ASUS than to give half of its business away for NT$8 billion-- approximately $244 million USD.
"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il
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