Asus pins future on small but mighty laptop

FREMONT, Calif. -- Asus plans to be the No. 3 laptop maker in the world in six years.

Pretty ambitious, considering that many Americans probably have never heard of the Taipei, Taiwan-based company.

Asus' big goal rides on a tiny product: a hugely successful, itty-bitty laptop called the Eee PC. It's a bit larger than a tissue box, weighs just 2 pounds and starts at the bargain-basement price of $299.

There's nothing quite like it on the market. Buyers — many of them early adopters — are snapping up Eee PCs almost as fast as Asus can make them. The company expects to sell nearly 2 million in the first six months of the year. They're available at Best Buy, Amazon and many local retailers.

This week, Asus launches a $549 version with a bigger screen and more features. A desktop version is on the way, probably this summer, says Jackie Hsu, president of Asus' U.S. division. More Eee products are on the drawing board.

The company has helped create a new type of computer — a laptop that's both small and inexpensive, says tech analyst Bob O'Donnell at researcher IDC.

The market will grow, but not fast enough to generate numerous big successes, O'Donnell says. "Asus has gained a lot of mindshare … for such a little company. But they're going to be under a lot more pressure."

Big leap for small laptops

The market for sub-$500 laptops was marginal until 2007, when 430,000 were sold, O'Donnell says. That number is expected to jump to 3.6 million this year, with the vast majority of sales in the USA and Asia.

That's a surprise. Cheap, small laptops were rare until a non-profit group, One Laptop Per Child, started cranking out student-size computers in 2007 that sold for about $200. They were designed for a limited market, mainly schools in developing nations. So were similar computers from a rival project, Classmate PC.