MSI competes with itself

When brand and OEM collide.

Taiwanese component maker Micro-Star International (MSI) is cannibalising its own business as its brand name operations extend while its OEM business shrinks, according to Digitimes.

Henry Lu, vice president of MSI, said the company had a conflict of interest because its branded business is performing well but its OEM operations have shrunk. Lu claims that in a stagnant laptop market for MSI it managed to shift only two million laptops in 2009. But out of those two million models, about 70 per cent were MSI branded with only 30 per cent getting rebadged in its OEM business.

Eating into its own business means MSI can't effectively run two separate business units when one of them is unhealthy. Lu said he was going to separate the brand and OEM businesses in the next three years but that's not viable now. Instead the company will have to concentrate on running the brand business because that's where the money is now.

Lu did report a better picture for motherboards with 18 million sold in 2009, ten million of which were MSI branded. He also added that MSI is confident about motherboard sales growth in 2010.