Asus feels the heat as the tax man comes calling

Asus feels the heat as the tax man comes callingIs Asus going to be next big mobile manufacturer to fall on hard times? So long as it remains Google's go-to-guy for Nexus devices, probably not.

But its latest quarterly balance sheet does give some cause for early concern – showing a significant 26% drop in net profits over the same period last year.

The obvious culprit was a massive NT$1.52bn (around £32m) payoff to Mr Tax Man, an amount sure to take the shine off any bottom line.

But reading between the lines, there are other problems Asus needs to address. While the Nexus 7 tablet built for Google continues to prove popular into its second generation, its super-aggressive price tag doesn't yield much by way of profits for Asus.

And while Asus' quirky Transformer range arrived as a breath of fresh air to shatter the then-fixed product niches of phone, tablet and laptop, everyone these days is doing hybrid devices.

What Asus really needs is for its push into smartphones to be a success. The first Asus phones are expected to appear at CES 2014 in January, and Asus CFO David Chang isn't underestimating how important it is for the company to hit the ground running.

“We remain optimistic about the desktop and laptop market, but our priority is to make the company’s smartphone business turn a profit next year,” Chang said as Asus' figures were released yesterday.

Asus CEO Jerry Shen added that talks are already in progress for Asus to produce a third Nexus 7 later next year – no surprise considering how well the first two have proved.

Via Android Community

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