Asus 2014 Annual Report Download - page 5

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I. Letter to Shareholders
Dear Shareholders:
Thank you for your long-term support.
In 2014, the global Information and Communications Technology industry continued to experience rapid
change. The demand for Tablet PCs in the United States and Europe began to decline, resulting in a
decline in shipments over the short term. The PC market, which has suffered depressed sales for more
than three years, has seen demand gradually stabilize, and increasing product shipments reflect the
rebound in the European market. Meanwhile, the smartphone market has continued to expand as new
product types—such as wearable devices, cloud applications, the Internet of Things (IoT), and robotics
technology—receive more attention and investment.
In an environment where rapid change is a constant, ASUS has adopted the philosophy of "old wisdom
with new thinking". This idea involves maintaining existing values and a competitive edge while
employing new ways of thinking in order to generate innovation in all product lines and applications
while also implementing new marketing models. The Internet of Things continues to drive ASUS forward
with respect to product design, customer experience, brand marketing, inventory management, after-sales
service, and in other areas. What remains unchanged within ASUS is the ultimate goal of providing
consumers with digital device experiences that enrich and enhance life. Reflecting the varying demands
of Internet users, ASUS will advance in step with market trends while maintaining its corporate
philosophy of In Search of Incredible.
A review of ASUS operations in 2014 shows that ASUS notebook computers continued to achieve strong
sales growth in various markets. We attribute this success to innovative design and quality. In 2014,
additional resources were invested in developing our desktop computer product line, and in commercial
market operations. Our motherboards business won a global market-leader position, and we continued to
invest additional resources in an effort to cement our dominance in that sector. The successful launch of
the ASUS ZenFone opened up vast new opportunities across global smartphone markets. The ZenFone
was well-received in markets where it was launched. In fact, its popularity increased so rapidly
quarter-by-quarter that we faced challenges in ramping up production fast enough to meet growing
demand. The success of ZenFone was driven by a number of factors, such as excellent product design,
new pricing strategy, efficient channel management, and extensive word-of-mouth marketing. Our
strategic thinking and marketing brought further brand recognition for ASUS as well. According to
computer industry ratings of Fortune magazine, for the first time in the Company’s history ASUS was
ranked sixth among the World's Most Admired Companies in the computer industry in 2014. ASUS also
earned the top position in the 2014 Survey of Taiwan International Brand Value rankings, as published by
the Ministry of Economic Affairs. The survey ranking acknowledged ASUS as the most valuable
international brand in Taiwan. All of these hard-won results came from strategic thinking over the short
and long term, and they prove again that ASUS is firmly on track as a leading innovator in the ICT
industry.
Operating results for 2014, and the operational outlook for 2015, are summarized as follows:
Financial Performance
The 2014 consolidated revenue of ASUSTeK Computer Inc. totaled NT$477.4 billion, a 3% increase
compared to 2013. The net income attributable to shareholders of the parent Company accounted for
NT$19.47 billion, a reduction of 9% compared to 2013. The decreased net profit was due primarily to
high non-operating revenue gained from stock disposal. In 2014, consolidated operating income for
ASUS computer brands reached NT$436.3 billion (unaudited corporate number), growing by 4%
compared to 2013; and operating profit for ASUS computer brands reached NT$20.29 billion (unaudited
corporate number), growing by 3% compared to 2013.