Google Inc (GOOG) and Asustek: Is a Breakup Coming?

Many companies long for the day that they are able to form a partnership with Google Inc (NASDAQ:GOOG). Others, however, realize that good things can only last for so long. They realize that at some point they have to move on and do their own thing.

It appears that Google Inc (NASDAQ:GOOG), led by Larry Page, may be moving away from doing business with Asustek Computer.

According to a recent report by Monica Chen and Joseph Tsai of Digitimes, Google is considering a replacement for the manufacturing of future Nexus products.

Although it appears that Google is at the center of the change, Asustek is also looking to move on. The company is hoping to promote its own brand products as a means of distancing itself from the search engine company.

Jerry Shen, CEO of Asustek, has noted that the company has hopes of reducing “Nexus 7’s shipment proportion to below 50% by the third quarter of 2013 and to 20% by the second quarter of 2014.”

As you can see, this is a big drop off over the next nine months or so.

Google Inc (NASDAQ:GOOG) and Asustek: The Past

In 2012 alone, Asustek shipped more than six million tablets including the first generation Nexus 7. In 2013, the company has even bigger plans with tablet shipments reaching 12 million.

Despite the success the two companies have had together, Asustek wants to stand on its own two feet moving forward. You don’t have to look any further than the devices the company released at IFA 2013. This included the seven inch Fonepad 7 as well as the eight inch MeMO Pad 8. Both of these tablets are loaded with features, such as the eight inch IPS panel with 10-point touchscreen technology on the MeMO.

It appears that the split is something that both companies are happy with. Google Inc (NASDAQ:GOOG) is not going to have any trouble finding another partner, and Asustek is hoping to stand out with its own brand name products in the years to come.

Over the last few months of 2013, we will pay close attention to what both companies are doing. In particular, it will be interesting to see where Google Inc (NASDAQ:GOOG) turns next.

These hedge fund managers continue to invest heavily in Google: Robert Karr, Daniel Benton, Sandy Nairn, Gregory Bylinsky, and Christopher Hansen.

Disclosure: none