USA vs Taiwan: Asus and Gigabyte come to blows

A WEEK AGO we broke the news that a formal Asus lawsuit against Gigabyte was not just a veiled threat, but very imminent. Soon after, it happened.

In a similar situation, two big vendors would probably settle out of court, at least to save on lawyer's fees. But in this case, the ill will and acrimonious relationships between the two companies lends us an unique opportunity to watch what will possibly be the first full-scale trial - and all spinning around that mobo power-saving feature which is usually so low on the list that I don't even bother mentioning during board reviews.

Now, remember our interview last October with Asus President Jerry Shen? That paragraph about them becoming a true (global?) high-end system brand? Now, that would put them - and Acer, Foxconn and other Taipei vendors with similar inclinations - directly onto a collision course with the only two remaining true Tier 1 USA PC vendors: HP and Dell.

Now, from their apogees of achievement a decade or two ago, these two vendors are now just dusty, crumbling skeletons of their former glorious selves. Why? Well, that lethal combination of outsourcing to faraway places combined with killing off unique technologies and making top engineering, design and support teams redundant seems to have been applied by 'inside corporate destroyers' pretty comprehensively.

In our business, when it comes to the overall supremacy including the brand, the full control of the design, technology and manufacturing does matter a lot. And yes, it benefits cost management too.

Now, Taiwanese vendors have been doing the opposite of the USA ones: they pretty much control the whole vertical right now, and even if they outsource or spin off the OEM divisions, the real control is still in the same hands.

I'd like to see what kind of lawsuits we may see this year, when these few remaining top US names get hit with similar or better Taiwanese gadgets and fancy product features covering everything from low cost to leather-clad top notch stuff.

I foresee laptop and high-end gaming or server systems as the first line of "attack" here. Everything from unique design features, board level stuff, firmware and software in those systems will be subject to heavier-than-ever scrutiny by the incumbents.

Will the likes of HP or Dell try to find a reason to use legal means to hold off the Taiwanese high-value brand invasion? Yes they will, I believe. Will they succeed? Maybe, if they still have at least some true techies in-house able to discern the right stuff from the copies.

Finding such brains might be a bit hard right now, since "penny wise, pound foolish" outsourcing has taken its toll already over the years. Personally, I think the damage is done and no lawsuits will be able to stop this wave - give it a year, two or three, I feel the Taiwanese have won this battle.

And yeah... you read that here first, too. µ