MSI Mega Stick 1 - The Mini Wonder

The motherboard market has reached a threshold for market maturity, and because of this, profit margins on motherboards and video cards are razor thin. This is even evident in the number of motherboard and video card manufacturers that have remained, for the most part, successful. The big three motherboard manufacturers, MSI, Gigabyte, and Asus, are still feeling the heat related to profit margins, and therefore are continuously on a quest to diversify their product portfolio. This is reflective of what we have seen going on in the Taiwan technology stock market. This is also transparent of what we heard at Computex and in our first CEO Forum.

One of the most un-treaded areas for motherboard makers is consumer electronics, as this encompasses a wide spectrum of products from everything from LCDs to MP3 players. In our first PM Forum, 62% of product managers reported that they are currently pursuing consumer electronics. Now, this figure includes companies that have not announced their consumer electronic product lines, but still are pursing such products internally. This is in contrast to small form factor (SFF) PCs, which all companies reported to be pursuing.

While SFF is a phenomenon market and can be a cash cow for many, it will not remain so for a long time, since it is also bound to mature. As this market matures, we should expect to see motherboard companies turning to other outlets to make a name for themselves. After all, the name Shuttle, which was previously unknown to many, is now all but synonymous with small form factor.

We saw many motherboard manufacturers turning to very interesting product lines, some of which took us completely by surprise and others were very expected. Asus, for one at Computex, introduced their cellular phones, which are expected to sell overseas in areas such as Europe and Asia. We have been informed that there are no such plans to introduce them into North America, however. Meanwhile, there are other innovative products that take what already is and improves on it. MSI is a great example of this with their Mega Stick 1. MSI has taken a USB flash drive and turned it into a fully functional, on-the-go solution: FM tuner, FM recorder, voice recorder, MP3 player, and of course, a storage device. This may not seem like much at first, but we found out otherwise once we put it through the paces…