The fears were ignited by the launch of Amazon`s "Kindle Fire" tablets, which have been priced as low as US$199 (NT$6,109), prompting investors to think Acer and Asustek will soon join the price war to attract buying interest, they said.
As of 11:20 a.m., Acer shares had fallen 4.46 percent to NT$34.25 (US$1.12) with 33.87 million shares changing hands, while Asustek shed 5.35 percent to NT$203.50 on volume of 10.88 million shares.
The benchmark weighted index was down 0.11 percent at 7,006.22 points.
According to iSuppli, a market advisory firm, Kindle is selling the newly launched tablet model below its costs of about NT$209.
Soon after the Kindle Fire launch, smartphone maker HTC marked down its tablet "Flyer" in the U.S. market to US$299 from US$499 to compete.
"Non-Apple tablet computer vendors are faced with a pressing challenge to woo consumers," Concord Securities analyst Henry Sun said. "Amid weakening global demand, the pressure seems to have increased."
"Sentiment toward non-Apple tablets has been dampened seriously," Sun added. UBS Securities said that within the non-Apple tablet camp, the launch of Kindle Fire, which is based on cloud technology, is expected to erode sales of tablets that use the Android operating system, such as those supplied at present by Acer and Asustek.
Though tablet computers represent only a small fraction of the revenues of the two Taiwan-based companies, Sun said, the price competition has had a psychological impact on the two PC vendors.
"As global financial markets remain volatile, investors here tend to amplify negative leads like this, and they rushed to cut holdings in the two stocks to avoid further losses," he said.
Sun said Asustek and Acer are particularly vulnerable because their major market is Europe, where inventory remains high and debt problems could further dampen consumer confidence and drag down demand for their products.
He said the two companies` shares were expected to encounter further downward pressure on their share prices in the short term.
(T.A045/M016)
Editor: Priyambodo RH
Copyright © ANTARA 2011
