Earlier this week the ASUS Eee PC celebrated its first birthday (with a full birthday party and cake at LAPTOP Magazine). It was one year ago that the Taiwanese company began selling its first sub-notebook (which would form a new category known as netbooks). The little Eee PC 701 not only would spur on a whole Eee brand for the company and line of different sized Eee PCs, but it would push the competing notebook manufacturers into the netbook market as well. As the Eee PC, and arguably the first consumer netbook, turns one we checked in with ASUS CEO Jerry Shen who has spearheaded the company's Eee brand and its push into the netbook market. A year later, Shen isn't fearful of the onslaught of netbooks hitting the market from the likes of Samsung, Lenovo and Dell and only thinks the market is just starting to take off. Why? Well he shared the following in the hour long interview:
- Four million Eee PCs have been sold to date. He plans to reach the goal of 5 million Eee PC sales by the end of 2008.
- Touch-enabled Eee PCs are on the way and will be here by early 2009. Shen didn't share the details of the form factor, though he said they are exploring a convertible mode and a regular laptop form for touch-enabled Eee PCs. They will also run Windows 7 as early as mid-2009.
- Several skus of the Eee PC give customers numerous choices and allow them to find the Eee PC that best fits their needs.
- The Eee Family continues to grow with the EeeTop this month (that has an Easy Mode for Windows XP) and more products that will be announced at CES in January 2009.
That is just a bit of what Shen shared with us. See the full interview below and why we think the Eee PC's second birthday may be more exciting than its first. Did you anticipate that the Eee PC would spur such a large category and that it would get the worldwide reaction it did? When we launched the product last October, we saw immediately how popular it was and how well it sold. At the end of that year, I set a goal to sell 5 million by the end of 2008. So, for that first year, it went well beyond our expectations, but I hoped that this year would be very successful and we are on the right track. We knew that we would see competitors in the market and like Intel, we see this netbook market to be one of the largest areas of mobility in the future. You mentioned being on the right track for your goal for 2008. How many have Eee PCs have you sold to date this year? Being that our goal is for this year is 5 million, we are confident that we will hit that. We are pretty close to 4 million now. The competition has really been ok and hasn't set us off our goals. Does that 5 million contain the other Eee Family products? Since the Eee PC has been so popular we have built out other Eee family members. The Eee Box was the first and at the end of the month we are releasing the EeeTop. We also have the EeeStick. And we will have another two other Eee products in January that we will announce. That 5 million only refers to Eee PC sales, and it doesn't include the EeeBox. The goal for the EeeBox has only been a few couple hundred thousand. Speaking of the EeeStick, will that be available soon? And any idea of pricing? We will start to bundle with the EeeBox, EeeTop and the EeePCs soon. It will be available with some machines and we will put on some games on those for playing with the EeeStick. It can also be used for presentations. In some countries we will sell it separately, but it should be some place between $50 to $100. Is there a particular Eee PC model that has done better than others? For the first quarters of the year we only had the 7-inch and that did very very well. But in Q3 going forward the 9-inch and 10-inch are selling very well. The 900, 901 and the 1000 and 1000H are selling very well. I think the 9-inch and 10-inch and the 1024x600 resolution was a good solution. But still many of the customers want the 7-inch. Do you think the Eee PC can get any bigger? Will we see 11 or 12-inch Eee PCs later this year or in 2009? In my viewpoint, if we go to an 11-inch or 12-inch it will become a notebook. The real difference between the Eee PC and notebooks is the screen size. We use the screen size as the key differentiation between the Eee PC and the notebook. So I do not think we will release anything larger than 10-inches. How has the success of the Eee PC affected the rest of Asus’ notebook business? Do you feel as though it has cannibalized the sales of traditional notebooks if not for your brand but for others? At ASUS, when we define Eee PC, we define the Es as easy, exciting and excellent Internet experience. So no we haven't seen the cannibalization. In fact, in many areas, it's been the opposite. For example, in Japan originally our notebook business was very small, but after the Eee PC our notebooks have become very popular. The Eee PC has brought ASUS to people's awareness and it has helped the notebook business. This has happened in many countries. Then what is the role of the ASUS N10 which you are not calling a netbook even though it is powered by an Intel Atom processor? What really makes this different from an Eee PC and what are you trying to accomplish with this separate N series brand? Originally we wanted to make a notebook with a 10-inch screen so we did that with this product. But in the future all the notebooks will start from 11-inches. So I don't think we will do this in the future. In the future we will include the 10-inch in the Eee PC line. For us, the difference though between netbook and notebook, is that the netbook is used to consume content and have that connectivity experience. The notebook is for creating content and you have more storage and memory – its a machine that can do more. We have heard that return rates have been higher for Linux-based netbooks. Can you share information on sales of the Linux Eee PCs versus Windows XP versions? What about return rates overall for Eee PC netbooks? I think the return rate for the Eee PCs are low but I believe the Linux and Windows have similar return rates. We really separate the products into different user groups. A lot of users like the Windows XP, but in Europe a lot of people want the Linux option. Actually in Linux we support the Easy Mode and in Q4 of this year we are going to start selling Windows XP with an Easy Mode. What is the purpose of the Windows XP Easy Mode? The Easy Mode on Windows XP is very similar to the one on the Xandros operating system. For the novice and for the person who doesn't know how to use the computer, Easy Mode is better. We provide this option on Windows XP if people want a simple interface, but they can also use the full operating system. Seems very cool. Seems like something that could help with Vista. Do you think its something you could put on Vista? I think we could, but we don't plan on putting Vista on any of the Eee PCs. I think in the future in the second half of next year we will put Windows 7 on Eee PCs. For now it will be Linux and XP and then Windows 7 and not do Vista. Windows 7 is really being touted for its multi-touch capabilities. Can you share any plans for touch Eee PCs? Some of the models will have this function next year, but not all the models. The touch function has its advantage but also some disadvantages. The machine will have to be thicker if it has touch and we want to have slim machines still. Would you go with a tablet convertible form or build touch also into the normal laptop form? We are considering both. We are considering a tablet one and also a different alternative and form but we cannot talk about the details. We plan to talk about it in Q1 of next year. There are currently several Eee PC models for sale, whereas other vendors might have one or two SKUs. Do you believe that there are too many Eee PCs on the market? Is it confusing for customers? The Eee PC evolution from 7-inch to 9-inch to 10-inch all tried to help solve customer needs. We are still trying to accommodate customer needs. I think the user now has a lot of choices and it's good. For instance, different 7-inch versions have been popular with telcos. The models all provide different flexibility for customers and end users. Newer premium models of the Eee PC have appeared, including the S101. What is the thinking in making a higher-fashion subnotebook? Do you think people will pay extra for the style? In our definition the Eee PC S101 is the highest end system in the Eee category. The S101 is a result of customer's feedback - there is a group that wants a stylish machine but is also hooked on the easy Internet machine. We have responded to the customer's wants and the S101 is the top one in the line up so we think people want this type of package and price. When will we see the next Eee PC? We will provide more exciting products next year and the price range will be from $250 to $700. We will announce a model in Q1 and in Q2 of 2009. They are exciting and in my definition they are cool and the industrial design is stylish. We work hard to incorporate five sense innovation. We also want to make sure the innovation has low temperatures and long battery life. We want the user to experience fast boot up times, quiet performance, a very long battery life and low temperatures. Is there a plan to use Atom's dual core processor in those future Eee PCs? In many people's point of view the current Atom is pretty good. In the future we think the netbook we will focus more on the core consumption. We will work on making battery life longer and more mobility but not in the computing. Actually we are working on technology called ExpressTest which improves boot up time and battery. All our Eee PCs will use this technology and the first to use it is the Eee PC S101. Are there batteries in the works to create longer battery life for Eee PCs? Atom has been pretty good for battery life and we have added our Super Hybrid Engine for added battery savings. We also have the 2600M and 2900M for higher density batteries. Wrapping up the year, since the Eee PC 701 ASUS has extended the Eee brand to other non-notebook products, such as the Eee Box and the Eee Monitor. Are there plans to build out the brand in the coming year? Is there an Eee phone in the works? For the phone, I think we will still use the ASUS name but the Eee brand ideas will be part of that phone. We will bring more products in Q1 under the Eee family brand, but we can talk about this at CES. We will show off a lot of new products at the show for Q1 2009.
