First-tier motherboard brand vendors Asustek Computer and Gigabyte Technology, after starting fierce price competition to gain market share in China, are already turning their competition to after-sales warranties, according to sources from motherboard players.

With a strong confidence about its motherboard quality, Gigabyte has recently increased its free warranty to four years, one year extra than most of its competitors, hoping to attract consumers; however, the same policy was soon also offered by Asustek. While the strategy will seriously increase the related motherboard maintenance cost, smaller competitors may face even more difficulties to compete as they are already suffering from the impact of the top-2 players' price competition, the sources noted.

The sources pointed out that the motherboard segment is the major profit source of Asustek with more than half of the company's profit was contributed by the business in the first half. Therefore, Asustek is even willing to sacrifice its profitability to prevent Gigabyte from catching up and to meet its shipment goal of six million units in the third quarter and 23 million units in 2011. However, the competition may start pushing smaller motherboard players out of the brand market in 2012.

Source:digitimes