News : Small PCs big news as economy slows

By Baker Li

TAIPEI (Reuters) - Smaller, low-cost PCs are likely to be at the top of the shopping list for technology buyers gathering in Taipei this week for the world's second largest computer fair, as an economic slowdown in the United States forces consumers to cut back on spending.

Shoppers are feeling the pinch from rocketing fuel costs and rising prices, and in the United States the subprime crisis has left lenders less willing to hand over credit, leaving some consumers reluctant to buy new expensive personal computers and gadget heavy mobile phones.

Cheaper, low-cost PCs, such as Asustek Computer Inc's (2357.TW: Quote, Profile, Research) Eee computer, aimed at emerging markets and buyers of additional computers, may keep growth on track for many computer and component makers.

These PCs, many with longer battery lives and wireless connection features, will share the stage with a line of eco-friendly computers with slimmer, energy-efficient displays and solar power systems, designed to cut power consumption as oil prices soar and consumers seek ways to reduce their environmental impact.

"We don't have deep pockets now," said Kevin Chung, manager at Taiwan's Jih Sun Investment Consulting.

"We really have to watch closely on the buying interest because that is going to be a signal on how the recovery's strength will be in the second half."

Asustek Computer, which makes the runaway success Eee PC, will display new, wider-screen models that allow users to do everything from storing video clips in shock-proof flash memory and surfing the Web in coffee shops.

Acer Inc (2353.TW: Quote, Profile, Research), Taiwan's most famous PC brand, will also test the water by introducing similar low-cost PCs as it expand into fast-growing emerging markets, including China and India.

"We will launch a notebook different than the ones we've sold before and targeted at a new consumer segment," an Acer spokeswoman said.

Next to Acer's booth, Intel Corp (INTC.O: Quote, Profile, Research) will be promoting its new processors, as the U.S. chip giant sees a big market for ultra low-cost PCs that can fit in one's pocket and for the netbook, a PC selling for about $250.

WIMAX

The show's organizers say a total of 1,725 exhibitors, including foreign technology companies, such as Intel and AMD (AMD.N: Quote, Profile, Research), will attend the June 3-7 show in Taipei, up 29 percent from last year to a record high.

They arrive at a time when semiconductor and display makers are scaling down their capital spending to ease pressure on the supply side, and when a new batch of computers, mobile phones and game machines have just hit the stores.

Research firm IDC predicts that worldwide PC shipments are expected to rise 13 percent, to reach 296 million units in 2008, and will grow about 10 percent in each of the next two years.

For the first time, Computex buyers can have a quick tour by using trial laptops that have an ultra-high-speed Internet technology, WiMax, built in when they take free shuttle buses, the organizers said.

Many Taiwan PC makers and telecom operators have pinned their hopes WiMax technology winning the battle to be the fourth-generation mobile standard of choice.

Global spending on WiMax infrastructure, including base stations and equipments, is likely to grow to $3.5 billion in 2011, more than tripling from 2006, according to IDC.

"WiMax has been getting much chatter and with players like Sprint (S.N: Quote, Profile, Research) and Google (GOOG.O: Quote, Profile, Research) coming in, its a huge push for the technology," said Rosemary Ho, Chairman and CEO of Global Mobile Corp, a WiMax license holder in Taiwan.

Intel has also made a big bet that mobile WiMax will take off soon, even though many large operators in developed countries are throwing their weight behind a rival technology, known as Long Term Evolution (LTE).

(Additional reporting by Sheena Lee)

(Editing by Louise Heavens)