Netbook maker reduces shipments due to success of Apple's iPad

Asus will ship fewer netbooks in the third quarter of 2010, as sales of the low-power, low-priced machines have dropped due to strong competition from the Apple iPad.

Speaking at an investors conference, president and CEO of Asustek Computer Jerry Shen said his company will ship 1.4 million units in the next quarter, a lower number for its peak sales period. The slowdown in netbook sales is "mainly due to competition" from the iPad, according to DigiTimes.

The company now expects to ship just 1.4 million netbooks in the third quarter, less than the 1.5 million it shipped in the second quarter of 2010, or the 1.6 million to start the year. Asus will launch a new 10-inch netbook running Windows 7 for $399 in September, followed by an 8.9-inch tablet running Linux and powered by an ARM processor for between $199 and $299 in October.

Asus has become one of the top PC makers in the world based on the strength of its netbook sales. In the June quarter, it shipped enough computers to make it the fifth largest PC maker in the world.

Apple's iPad has been viewed as a netbook competitor, and even positioned as one by Apple. When the iPad was first unveiled in January, Apple co-founder Steve Jobs directly compared it to existing netbooks on the market, noting that he felt the new product was lighter and more useful than low-cost netbooks, which he said are just "cheap laptops." With a 9.7-inch display and weighing just 1.5 pounds, the keyboard-less, touchscreen iPad is a much different form factor from the traditional laptop.

When including the iPad in total portable computing sales, Apple vaulted past Asus and others, according to estimates released earlier this month. The iPad sold 3.27 million units in its first three months of availability.