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Taiwan's MSI gunning to be the HTC of tablets

July 13, 2010 |  2:06 pm

Msi-tablet-pc As HTC carries out its so-far successful invasion of the U.S. cellphone market, the Taiwanese company's neighbor to the north is staging an American blitz of its own.

Micro-Star International (MSI) is preparing an arsenal of touch-screen computers while riding the netbook wave with a series of budget-friendly laptops. The netbook trend appears to be waning, according to a report by Barclays Capital, and analysts and many manufacturers including MSI expect it to be supplanted by tablets.

Of the 24 all-in-one desktops that MSI advertises on its website, two-thirds include touch-screen monitors. Ten of those products employ multitouch technology -- pinching two fingers to zoom out on a photo, for example -- within Microsoft's Windows 7.

The company set up stations around Dodger Stadium on Friday showing team-branded netbooks and multitouch desktops. It was part of MSI Night at the stadium -- one piece of a major marketing effort that started five years ago and only recently extended into the U.S.

"Sooner or later, we had to face this problem," Henry Lu, MSI's cofounder and global senior vice president, said in an interview with The Times shortly before the technology executive threw out the game's ceremonial first pitch. "We don't have a name brand."

It's no secret that MSI isn't the only computer maker in the tablet-PC space. Dell sells two consumer laptops under the Latitude XT2 brand that have multitouch screens and various tablet PCs targeting professionals. Hewlett-Packard has its TouchSmart line of desktops and provides optional multitouch features on some laptops. Acer also sells a multitouch desktop.

But those are lipsticked PCs, still tethered to mice and keyboards.

Tablet PCs have been around for more than a decade. Microsoft cofounder Bill Gates predicted in a 2001 interview with CNN that tablets would be the top-selling computing devices by 2006. While his timing was off, tablets are finally in the midst of a popularity explosion, thanks in no small part to Gates' longtime competitor, Steve Jobs.

Apple's iPad sold 3 million units in the first 80 days after it went on sale in April. After successfully reinventing the smart phone with its iPhone, Apple brought many of the same principles that catapulted its phones -- multitouch display, app store -- to revive the tablet category.

On the whole, slates -- usually smaller, hand-held computers with no peripherals -- are in the midst of a market outbreak.

Again, how did this happen?

"It's because it's Apple," MSI's Lu said. The Apple effect. Magical, if you will -- Jobs' will.

Msi-tablet-touch More than a dozen manufacturers, including Acer, Dell, HP, Samsung Electronics, Sony and MSI, are working on slates running Windows, Microsoft Chief Executive Steve Ballmer told an audience at a conference Monday in Washington.

Exhibitors at Computex -- a computer conference at the beginning of June in Taipei, Taiwan, where MSI is based -- showed dozens of tablets running Google's Android mobile operating system.

Responding to what was shown at that conference, smart-phone juggernaut HTC maintained, as it had in January when it announced the cancellation of its tablet project, that it would stay out of the computer space.

"You’ve seen how at Computex there were 80 different Android tablets," HTC spokesman Eric Lin told the blog Pocket-lint. "So if we just release an Android tablet, then we’re one of 81."

HTC has instead varied its lineup of smart phones, some small and some large -- the latter begin to encroach on tablet-sized devices. Some of those phones employ Windows Mobile while the more popular ones rely on Android.

HTC may be wise to avoid competing directly with Apple in this emerging category of tablets so as not to further wake the beast. Apple has sued HTC for patent infringement on technologies that the Taiwanese company uses in phones, such as multitouch, in what some consider to be a proxy war with Google. HTC is one of the key makers of Android phones, manufacturing the premier G1 for T-Mobile and the Nexus One, which carries Google's name, not HTC's.

Yet two years ago, HTC was still mostly unknown in the U.S., and Google's only notable role in mobile was a mapping application for smart phones.

MSI is looking to pull off a similar acrobatic routine to break into the touch-screen computer market. When asked about his compeers at HTC, MSI's Lu chuckled and strained to dislodge a focused thought.

"Our product is really excellent," Lu said. "What we don't have is a name brand."

Since 1985, MSI has made and assembled products for other companies -- one of those being "a big guy," a company whose name Lu won't disclose because of business agreements. MSI now competes with the tech giants.

The story of HTC, or High Tech Computer as it was known before a corporate rebranding, is similar. It began in 1997 as a maker of less-sexy notebooks.

While MSI is preparing its Windows-based Wind Pad slate and discussing the prospects of an Android tablet, the company still has a long road ahead of it. Its future depends on how quickly consumers take to tablets. An even greater X-factor is whether they choose MSI over the myriad alternatives. HTC's market capitalization is about 22 times that of MSI's.

So far, consumers have voted that they need -- or at least really want -- phones. Tablets and portable computers haven't seen quite as much enthusiasm lately. So why not make a cellphone?

"It's bloody," Lu said of the mobile industry.

-- Mark Milian

Photo, top: A model poses with the newly launched MSI 3-D enabled and multitouch-screen computer, the Wind Top AE2420, at a media preview in Taipei, Taiwan. Bottom: A woman touches the screen of the new MSI computer. Credit: Nicky Loh / Reuters