IBM, BenQ tie up to tap Asia-Pacific computer market

Taipei, Dec. 16, 2003 (CENS)--Leading computer brands IBM of the United States and Taiwan's BenQ Corp. of Taiwan jointly announced that they would jointly tap the Asia-Pacific market.

Industry sources said that the IBM-BenQ tie-up, an IBM's intention to ally with a minor rival to fight major ones, is expected to add a new variable to the already extremely-competitive domestic notebook PC market.

According to their cooperation scheme, BenQ would supply liquid crystal display (LCD) monitors to match the sales of IBM desktop PC models, and the two partners would closely cooperate in the notebook PC sales in Taiwan.

Hank Hung, vice president of IBM Taiwan's personal-computing division, claimed that IBM and BenQ have their own expertise, in business and family segment, respectively, so the their cooperation would generate not conflict but mutual-benefits to their market-share expansion.

The IBM-BenQ tie-up came as a surprise to most industry insiders but was deemed a logical development. IBM and its major rival Hewlett-Packard Co. (HP) competed fiercely in Taiwan's domestic notebook PC market this year. The former was the No. 1 international brand in the second quarter and HP in the third quarter.

According to some insiders familiar with the cooperation project, IBM expects to utilize the integrated strength with BenQ to grab more shares from its targeted rivals in the domestic notebook PC market, including HP, Asustek Computer Inc. and Acer Inc.

In Taiwan, IBM has tied up with Weblink International Inc., a distribution arm of the Acer Group, and Wistron Corp. Weblink is also a major distributor of BenQ's IT products.

To meet the challenges from IBM, HP Taiwan said that it would re-organize its current distribution channels on the island and add a new distributor, Xander International Co., for its notebook PCs. With such changes, Industry sources said, however, that over half of IBM and HP's distribution channels would overlap and exacerbate their competition in the domestic market.

Currently, the top-four notebook PC brands, including Asustek, HP, Acer and IBM, together account for about 80% of the domestic market, leaving little room for a share gain by the leading brands. Hung claimed that IBM's strategic alliance with BenQ is a abnormal strategy to further expand the brand's market share though it will necessarily trigger another impact on the already extremely competitive segment.

BenQ claimed that its tie-up with IBM in the domestic market would achieve a win-win situation for the two parties. With the alliance effect, BenQ expects to sell about 100,000 notebook PCs in the domestic market, becoming one of the top-five notebook brands in Taiwan.