To expand its presence in the motherboard market, Asustek Computer is reportedly planning a new sub-brand, Red Flag, targeting mainly the entry-level and mid-range segments in China. Asustek pointed out that Red Flag is a new series of motherboards designed specifically for the China market, but is not yet at the scale of a sub-brand.
Asustek Computer and Gigabyte Technology each shipped 17 million motherboards in 2015, and with the exception of ASRock, second-tier and third-tier vendors such as Micro-Star International (MSI), Biostar, Elitegroup Computer Systems (ECS) and Colorful all suffered losses in the motherboard business.
Asustek waged fierce competition against Gigabyte in China and shipped 10 million motherboards in the country in 2015, slightly better than Gigabyte's 9.5 million units. To widen its gap with Gigabyte in China, in addition to continuing its existing promotions and aggressive pricing strategy, Asustek also plans to push Red Flag to take over the mid-range and entry-level segments.
Such a strategy is expected to greatly impact MSI, Biostar, ASRock and Colorful and force Gigabyte to adjust its pricing strategy. Asustek will establish a new team to specifically handle the new product series and the product line will have completely different specifications and pricing than Asustek brand motherboard products.
