BenQ story takes new turn as firm adopts new name

By Jason Tan
STAFF REPORTER
Monday, Apr 30, 2007, Page 12

In December 2001, over 100 reporters from around the world gathered at Suzhou, Jiangsu Province, to witness the birth of BenQ brand at its China headquarters.

At the time, Taipei-based BenQ Corp (明基) chairman Lee Kun-yao (李焜耀) never thought the company would one day have to say goodbye to the brand business.

On April 25, Lee made a surprising announcement at an investor conference in Taipei, saying that the consumer-electronics maker would spin off its brand operation in September, allowing the company to focus on original design manufacturing (ODM).

"It is going back to its roots after all," said Allan Pu (卜正倫), an analyst with SinoPac Securities Corp (建華證券).

BenQ spun off from parent Acer Inc in 1984 to become a stand-alone, original equipment manufacturing business. Back then the company was known as Acer Peripherals Inc.

In 1991, the company moved to the next level by venturing into ODM services, had an initial public offering in 1996 and changed its name to Acer Communications & Multimedia Inc in July 2000.

But in a bid to further differentiate itself from Acer, the company in 2002 adopted the BenQ name -- which stands for the company slogan ``bringing enjoyment and quality to life'' -- thus completing the switch from contract manufacturer to brand maker.

Since then, BenQ's road has been a bumpy one. Its shares closed at NT$13.3 on Friday, compared with a record NT$74.30 in April 2000.

"Creating a world-class brandname is an uphill battle. BenQ failed once and the brand now needs further reconstruction," Pu said, adding that SinoPac had stopped tracing BenQ because of its poor performance.

The failure referred to BenQ's takeover of Siemens AG's money-losing handset unit in 2005, which put BenQ in the red with six straight first-quarter losses.

BenQ said last September it would stop funding the German mobile-phone subsidiary, which is now being liquidated.

In September, BenQ will be renamed Jia Da Corp (佳達電通) -- meaning "excellent achievement" -- to provide ODM services that "are stronger than that of its rivals because of the wide coverage of high-end products like handsets, printers and projectors."

It will be easier for BenQ to spin off its brand into an ODM, because the scale of the brand unit will be much smaller after it has disposed of the Siemens handsets, Lee told investors last week.

The spun-off brand unit will retain the BenQ Corp name and initially will be 100 percent owned by Jia Da. Lee said there are plans to attract strategic investors to the brand unit, with Jia Da's stakeholdings in the new BenQ to decrease to 20 percent within five years.

Industry watchers remained skeptical on the spin off project, saying it will take some time to assess its real impact.

"Unlike Acer and Wistron Corp (緯創), a BenQ spinoff is not as clear cut, as both still share many resources and the same management," SinoPac analyst Tseng Hsin-kai (曾信凱) said.

In 2001, Acer, the world's No. 3 personal computer maker, spun off its contract manufacturing and design operations into Wistron, an individual outfit which was listed in 2003.

Both companies differ in management and operations, with Acer solely carrying on a high-flying brand business.

The spinoff of the BenQ brand has raised doubts as to whether Lee will finally say goodbye to the brand for good.

The road ahead might be a thorny one, but looking back, the 55-year-old Lee said he doesn't have any regrets.

"The BenQ brand will continue its mission as it is now a household name in China and Taiwan," he said. "One day it will become the pride of the Chinese-speaking world."

101 new year's sponsor war is on

BANG FOR THE BUCK: As the new year celebrations approach, companies local and foreign are eyeing the world's tallest freestanding building to advertise their brands

By Jason Tan
STAFF REPORTER
Monday, Nov 20, 2006, Page 11

On New Year's Eve last year, tens of thousands of revelers flooding the streets of Taipei Xinyi District were all excited to usher in the arrival of the new year.

When the clock ticked at 12am, the 128-second fireworks burst from the top floors of Taipei 101. People were not only enchanted by the fireworks, but also by a sentence projected on the world's tallest freestanding building.

The phrase "2006 Bravia by Sony" had caught everyone's attention, at the same time arousing curiosity among those who were not in the know.

Chao Yi-chien (趙怡茜) was with her two friends in a nearby building to witness the breathtaking moment.

The 22-year-old part-time tutor did not know the meaning of Bravia until she read news reports the following day.

Indeed, Japanese electronics giant Sony Corp managed to send its message across to potential clientele from all walks of life, and they are not limited to those in Taiwan.

The image of the world's tallest countdown was simultaneously broadcast by global media, such as the US' CNN, Japan's NHK and China Central Television.

The price reportedly paid to sponsor the fireworks was NT$20 million (US$60,661).

Taipei Financial Center Corp (TFCC, 台北金融大樓公司) operators have decided this year to push the price tag up to NT$30 million and prolong the fireworks display to 188 seconds.

"We want to break last year's record by showing a longer display of fireworks this time," TFCC assistant vice president Michael Liu (劉家豪) said.

"The firework countdown attracts international media attention and it is the biggest moment of the year for us," he said.

Already 10 companies have approached TFCC this year for possible firework sponsorship.

The list includes local and foreign big names in the computers, communications and consumer electronics industries. Even an automobile firm made contacts, he said.

Sony is definitely not missing out on the exposure this year.

Hiroyuki Oda, division president of Sony Taiwan Ltd, was all smiles last Wednesday when asked by media about the effect of last year's firework sponsorship.

"The impact was so much greater than we expected," he said.

All that the company initially wanted people to realize was that Bravia is the brandname of Sony's liquid-crystal-display (LCD) TV sets, he said.

Sony brought in its first LCD TVs to local stores in September last year, already throwing a bomb into the market with competitive pricing for the 32-inch model.

The price war caused a shortage for its TVs until October and sales shot to the No. 1 position the following month.

After the 101 sponsorship, Sony maintained its leadership in terms of sales amount for the next nine months until September this year, according to the company's latest statistics.

This translates to an impressive victory in the competitive market, as local makers such as Kolin Inc (歌林), Sampo Corp (聲寶), BenQ Corp (明基) and Tatung Co (大同) are fighting for a share with foreign big names -- Samsung Electronics Co and Matsushita Electric Industrial Co, which owns the Panasonic brand.

While the company is now gearing up for this year's firework bidding, Oda said Sony is still evaluating the campaign format.

"We are looking forward to any form of partnership with 101, but we haven't reached any conclusion yet," he said.

However, some locals were wondering if foreign brands should not have given way to local players to pronounce their branding powers to the world.

"Some people were complaining that 101 had given the advertising chance to a foreign brand last year," Government Information Office (GIO) Minister Cheng Wen-tsang (鄭文燦) said.

The office has decided to play the role of mediator this year by communicating with TFCC, hoping the latter will favor local firms.

The GIO has reportedly asked local big names, such as Acer Inc, Asustek Computer Inc (華碩電腦), BenQ and Giant Inc (巨大機械), one of the world's leading bicycle brands, to form a joint bid.

It hopes each of their brands will be projected on the four sides of the skyscraper.

But Liu said it might be an uphill task to please everyone as views from four directions of the building have a different "value." The tentative plan is to leave all attention to only a single brand, he said.

"What we are looking for is a productive and creative proposal. The sponsorship is not to use Taipei 101 as an outdoor media, but rather co-branding for both the sponsor and the building," he said.

Sony outbid others last year as its sponsorship did not end with the short-lived fireworks.

The deal also included the use of Taipei 101 images in Sony's corporate calendars and brochures, as well as further collaboration on the Sony Fair held in April at the Taipei 101 concourse, he said.

Xbox 360 gets a head start on PS3

CONSOLE WARS: Gamers flocked to buy the new Xbox 360 last Thursday, but Microsoft will still have its work cut out for it to gain share in the local market, analysts say

By Jason Tan
STAFF REPORTER
Monday, Mar 20, 2006, Page 12

Oblivious to the chilly 16?C weather, a long line of more than 300 gaming fans snaked through the concourse of Shin Kong Mitsukoshi Department Store (新光三越) in the Xinyi District last Thursday evening -- each eager to buy one of the first batch of Microsoft Corp's next-generation Xbox 360 video game consoles.

And just before 7:30pm -- 30 minutes after the official launch of the much-hyped console -- all 300 units allocated for initial sales had been snapped up.

Yu Cheng-lung (于正龍), a 29-year-old customer support executive at a technology firm, was the first in line, bagging the nation's first Xbox 360 unit, along with free goodies including accessories and game titles worth around NT$20,000.

He had camped out in the area for five days to secure his position.

"I especially like the new enhanced Xbox Live service, where I can play with other gamers around the world simultaneously," said Yu, who loves the Super Mario game.

He bought his first Nintendo Game Boy while in elementary school.

Introduced on Nov. 22 last year, sales of the Xbox 360 hit 1.5 million units by the end of December, with 900,000 units sold in North America, 500,000 in Europe and 100,000 in Japan.

Microsoft hopes to sell around 4.5 million to 5.5 million Xbox 360s by June.

On the local front, Microsoft Taiwan Corp refused to reveal its volume or sales targets, but industry sources estimated that the console's shipments will stand at around 12,000 to 14,000 units by the end of the month.

"Xbox 360 is set to offer gamers 360-degree enjoyment of digital entertainment. In addition to playing games, users can listen to music, watch movies and photos, and blend in with a PC running Microsoft Windows Media Center," Alexander Huang (黃存義), company director for the greater China region, told the crowd at the event.

The console was introduced in Hong Kong and Singapore on the same day.

To ensure that the console's release would cause a stir in the local market, Microsoft Taiwan invested more than NT$1 million in the launch party, and joined forces with firms from other industries, such as Ford Lio Ho Motor Co (福特六和) and 7-Eleven convenience stores.

"This time, the Xbox 360 comes with a fashionable design, making it a perfect fit with a TV set in the living room," said David Tai (戴宇翔), spokesman for Webzen Taiwan Inc, a local branch of a South Korean firm developing games for both the Xbox 360 and Sony Corp's PlayStation 3 (PS3).

Another selling point is Xbox Live, Microsoft's service that allows gamers worldwide to play with one another, and will eventually work with Microsoft instant messenger, said Jessica Hsu (許桂芬), a multimedia consumer electronics analyst with the Taipei-based Market Intelligence Center (MIC, 資訊市場情報中心).

However, the Xbox 360's head start does not guarantee that it will win more local market share from the PS3, even though Sony has delayed its release until early November due to problems with a copy-protection format for its Blu-ray high-definition DVD player.

This will put its launch a year later than Xbox 360's.

"Most vendors I talked to are still placing bets on the PS3. As the PlayStation offers more varieties of game titles and caters to Asian tastes, it has attracted a stronger base in Asia than Xbox," Hsu said.

Local PlayStation fans, who share similar tastes in role-playing games with their Japanese counterparts, are familiar with the console's interface, and therefore are willing to put their purchases on hold, she said.

Although there is no official local shipment data, sales of PS2s are estimated to be double those of the Xbox, while Nintendo Co's GameCube is the third-most popular console, according to Hsu.

Nevertheless, the debut of the Xbox 360 will serve as a catalyst for the local game development community.

While Microsoft in the past worked with Softstar Entertainment Inc (大宇資訊) to develop two titles for Xbox, it has roped in 14 other companies this time for Xbox 360.

Fans can expect to see a mahjong game and a role-playing game initiated by FunTown (戲谷) and XPEC Entertainment Inc (樂陞科技) by the summer, Grace Chou (周文英), senior manager of Microsoft's entertainment and device division, said at a press conference earlier this month.

Hsu said that the local community will benefit from the experience of collaborating internationally and hopefully will be able to transfer expertise to projects with other consoles.

"They have an edge, especially in content for online games. However, they might need to dedicate more resources and investment in console games as the technical details of the two are different," she said.

Instead of duplicating online games to make games for consoles, these firms should develop unique titles for the Xbox 360 platform, which is able to accept larger file loading and higher color resolution, Tai said.

Nintendo Wii wins over fans before debut

MODERN MAHJONG: The console is creating addicts of all ages, winning over entire families, and has even made a believer of Premier Su Tseng-chang

By Jason Tan and Shelley Shan
STAFF REPORTERS
Monday, Mar 19, 2007, Page 12

During the long Lunar New Year holiday last month, Mario Yang (楊士模) and his family found themselves absorbed in a new activity. His parents and grandparents were not playing mahjong this year, but rather were trying their hands at Nintendo Co's new Wii games.

"My grandma said now we can move around the house while playing games instead of just sitting in front of the computer," said 27-year-old Yang, who is an editor with an online news portal.

He rushed to a game shop on Feb. 15, two days before the holiday started, to purchase a Wii, which sports a motion sensor used to play virtual tennis, golf or baseball.

"This is a game console that the whole family can take part in," he said.

Like Yang, Liu Chi-chin (劉芷青), an office worker in Taipei, has also caught Wii-fever.

"It [the game] gives you a stronger feeling of reality than regular video games," she said. "Besides it is more like exercise, it can make you sweat quite a bit."

"Having seen the results of delayed launches in Europe for Sony's PlayStation Portable (PSP), Nintendo was probably using the same trick."

Anonymous market analyst

Liu said she and her husband had played games on Wii at least twice every day for some time, adding that her colleagues occasionally visited them and brought along an extra Wii Remote -- the console's wireless controller -- to join in on the fun.

The craze has even made its way into political circles. Premier Su Tseng-chang (蘇貞昌) is an avid Wii player and has called the console a "great invention that offers gamers a good workout."

The much lauded consoles, however, are not yet officially released in Taiwan.

Eager gamers have gotten their hands on Wii in advance by buying consoles imported from Japan or the US, where they have been available since November.

Yang, for example, shelled out NT$9,700 (US$293) to buy a Wii, the official price tag of which is US$250.

Local gamers have also been buying Wiis on auction Web sites or at major IT shops such as Nova.

Yahoo-Kimo Inc's (雅虎奇摩) online auction store has around 300 Wii units and 1,800 related peripherals for sale. Prices for the consoles range up to NT$14,000.

So far, the sole Wii distributor, Hakuyu Ltd (博優), has not set an official date for the console's debut on the Taiwanese market.

"Wii is coming soon and a large-scale debut party will be thrown for fans," one company official said.

Wii was the best-selling video game console in the US last month, with consumers buying 335,000 units, market research firm NPD said.

Microsoft Corp sold 228,000 units of Xbox 360 in the US last month, while 127,000 units of Sony Corp's PlayStation 3 (PS3) sold during the same period.

Industry watchers suspect that Nintendo is experiencing difficulties in constructing a localized version of Wii's online services for Taiwan, causing a delay in its official debut.

"Sony has branches in Taiwan to offer online support for the PS3, providing information about new game announcements and game testing," said Jessica Hsu (許桂芬), a multimedia consumer electronics analyst with the Taipei-based Market Intelligence Center (資訊市場情報中心).

But Nintendo has no local office, she said.

One analyst said on condition of anonymity that he suspected the delay of the launch could be a marketing trick to build anticipation in hopes of creating a buying frenzy when the Wii finally debuts.

"Having seen the results of delayed launches in Europe for Sony's PlayStation Portable (PSP), Nintendo was probably using the same trick," she said.

When PSP finally made its way to European stores in September 2005, it was already nine months after the console had reached Japanese stores and six months after it debuted in the US.

Wii does not boast sophistication in production or technology as compared with the Blu-ray feature of PS3, which means there shouldn't be any production shortages causing a delay, the analyst said.

Meanwhile, Wii made national headlines last week as the National Communications Commission, the nation's highest administrative authority monitoring the telecommunications industry, said that the government needed to check and certify imported Wii consoles to ensure that they would not interfere with the nation's telecommunications systems or pose health hazards to gamers.

The commission said it would not penalize consumers who bought Wii before its debut in Taiwan, but it urged gamers to be sure their units bore a legal certification label.

Nintendo coined the name Wii from the English word "we," to express the idea that console is for everyone.

Although Wii has become a sensation around the globe, some veteran gamers said that they would stay loyal to the Xbox or PS2 and to online games and would snub Wii.

Dennis Hsu (許定中), a home video game player, said that although Wii had the advantage of strong interactive functions, its resolution was poor.

He said it also did not satisfy those who are interested in role-playing games.

Max Lee (李俊毅), a college senior, said he thought the games Wii can offer are limited, given that the machine must be operated through the Wii Remote.

"I believe that all the hype will eventually go away once people get tired of it," he said.

Digital photo frames are the next big thing

By Jason Tan
STAFF REPORTER
Monday, Jul 02, 2007, Page 12

A year ago, computer maker First International Computer Co (FIC, 大眾電腦) was invited by a major European vendor to pitch for an original design manufacturing (ODM) project making digital photo frames.

It was FIC's first experience of developing these unconventional frames.

Despite failing to secure the client, the project opened a door to FIC, which decided to continue exploring the business segment for new opportunities.

After a year of effort, business is picking up and the company is currently in talks with European, US and Japanese clients, FIC's product marketing manager Richard Hsia (夏正權) said.

The company is set to start producing frames within the next six months with volumes expected to reach 500,000 units by the end of the year, he said.

"We have mastered user interface solutions and picture compression technologies, which gives us an agility when tailoring new photo frame applications," Hsia said.

Introduced to the market in 2001, a digital photo frame is a picture frame that displays digital photos using the camera's memory card, without the need to print them out. Most frames display photos as a slideshow, with an adjustable time interval.

Digital frames began to take off in Europe and North America in 2005 as prices started to drop.

Figures provided by the Taipei-based Topology Research Institute (拓墣產業研究所) showed that worldwide sales of digital picture frames are predicted to soar to 9.5 million units this year, from last year's 3.2 million units.

That figure is expected to climb to 16.3 million units next year and hit 50.2 million units in 2010.

That strong momentum spells a possible cash cow for Taiwanese makers, which are already well known for their strong ODM capabilities in notebooks, mobile phones and other consumer electronics.

And a number of local firms have already jumped on the digital photo frame band wagon, including car multimedia player supplier Action Electronics Co (憶聲電子), motherboard and PC maker Asustek Computer Inc (華碩電腦), panel maker Innolux Display Inc (群創光電), memory module firm A-Data Technology Co (威剛科技), as well as optical disc makers Lead Data Inc (利碟) and Ritek Corp (錸德).

"New features, such as the playing of MP3 music and videos, are a new plus for digital frames. This will make them become the second visual center point in the home, after liquid-crystal-display TVs," Topology analyst Liu Yu-wen (劉育文) said .

Consumers will want to decorate their houses with a few photo frames, just as some would buy more than one flat-panel TV to maximize their multimedia enjoyment, he said.

Local chip makers are positioned well to cash in on the digital picture frame craze.

Companies like Sunplus Technology Co (凌陽) and Genesys Logic Inc (創惟科技) offer chips with the basic features, such as the Jpeg code and a card reader, at competitive prices. But they must move fast to the next level of development if they hope to grab a larger market share, Liu said.

"Bluetooth connectivity, larger storage, or picture uploads to online photo-sharing sites are the next big things," he said.

The continued drop in the price of panels, such as the mainstream 7-inch panel, is the main driver speeding up the adoption of these frames, industry watchers said.

The retail price has attracted potential customers like Martin Chih (池德基), a manager at Madrid-based electronics accessories trading company Easy Products SL.

"I am looking to buy a digital frame, load it with a secure digital [SD] card that has my wedding pictures on it, and give it to my sister as a gift," Chih said.

Firich wins as casinos, lotteries gain speed in Asia

By Jason Tan
STAFF REPORTER
Tuesday, Jul 17, 2007, Page 12

Shares of Firich Enterprises Co (伍豐科技), an industrial computer manufacturer known for its point-of-sale (POS) devices, surged recently and a run of good news from the sector has left people wondering when it will surpass the NT$1,000 (US$30) mark.

Firich's stocks rose more than 14-fold within the last three-and-a-half years, to hit a peak at NT$985 on July 10, when the firm announced it would buy stakes in the Singaporean financial consulting firm Armarda Group.

Its shares closed at NT$865 on Friday.

Analysts attributed the company's strong performance to its early foray into the lottery and casino gaming segment.

"The lottery and gaming market in Asia has surpassed the US. This gives Asian makers including Firich a say in determining specifications of new gaming machines," Concord Securities Co (康和證券) said in a report dated July 9.

Macau casinos, for example, are expected to register sales of US$7.6 billion this year, up 10.5 percent from last year. Las Vegas gambling houses, meanwhile, will only post a 0.01 percent rise to US$6.7 billion, Concord statistics showed.

Asian companies faced a high entry barrier in the past, as US firms set most of the gaming specifications. But as Asians have ushered in more casinos and lotteries, Taiwanese industrial computer makers have rapidly cashed in on the gambling boom.

When Firich was listed on the over-the-counter GRETAI Securities Market on Dec. 15, 2003, at NT$70 per share, investors were unsure about the worth of the listing price as it was much higher than the NT$30 per share given to other POS makers.

Today, analysts are wondering when Firich will follow High Tech Computer Corp (宏達電) and E-ton Solar Tech Co (益通光能) in going beyond the NT$1,000 mark.

Firich made its first foray into the lottery market in 2003, when it landed a contract to supply lottery terminals to a South Korean client.

Last year, the Taipei-based company saw business further take off.

Firich commissioned Intralot, a Greek betting technology company, to contract-produce lottery terminals. It also jumped onto the Chinese sports lottery industry by successfully shipping 10,000 terminals to 16 provinces.

"Lottery business will account for as much as 60 percent of our total revenues this year, compared with last year's 40 percent," Firich chief financial officer Lai Ying-fu (賴盈甫) said.

Product margins are lucrative, with Firich making as much as 35 percent on terminals to Intralot, Concord said.

Firich is not alone in pursuing the fortunes generated by rolling dice.

Axiomtek Co (艾訊), another Taipei-based industrial computer maker, is expecting sales of its casino gaming machines to account for over 10 percent of total revenues in the second half of this year.

"The gaming industry is now heating up and we will continue to make more efforts to ensure we gain a stronger footing in the business," Axiomtek spokesperson Spring Yang (楊秀芳) said.

The company has key accounts from Europe and the US and is in talks with a handful of other US clients for possible deals, she said.

ICP Electronics Inc (威達電), Another industry PC player, also contracted the lottery fever this year.

The company, which celebrated its 10th anniversary in April, reportedly obtained its first order of lottery machines from Gtech Holdings, a US online lottery system provider. It beat other rivals including Advantec Co (研華科技) and Flytech Technology Co (飛捷科技) for the deal.

The order, worth NT$3.6 billion, will run over five years, the Chinese-language Apple Daily reported on July 10.

The company refused to comment on the orders.

Despite the high competition, Firich said it found out what it needs to do next to ensure its continued success.

On July 4, the maker signed a pact with Hong Kong-based LottVision Ltd, an operator of lottery solutions, followed, on July 10, by an announcement that it would acquire a 11.3 percent stake in Armarda for S$14 million (NT$647,000) to further boost its sales of POS devices and lottery kiosks in China.

Under the agreement with LottVision, ownership of Wu Sheng Technology Co (伍盛計算機科技) -- Firich's wholly-owned subsidiary in Shanghai making POS systems for the Chinese lottery market -- will be exchanged for a 15 percent to 20 percent stake in LottVision.

As LottVision has started to tap into the sports lottery market in China and other Asian countries, this will be a plus to Firich as it seeks to strengthen its presence across the Taiwan Strait and move into other regional markets, a Concord research note said.

"Selling hardware machines is a one-shot deal and we will have to wait for the orders for replacement in three to five years," Lai said.

But the strategic partnership with LottVision will pave the way for Firich to "gain a share in the lottery operator market as well," he said.

"Operators would gain stable and recurring income from lotteries, which places us one step ahead of our competitors," he said.

New Quanta chief seeks different business approach

By Jason Tan
STAFF REPORTER
Monday, Sep 03, 2007, Page 12

C.C. Leung, vice chairman of Quanta Computer Inc, the world's biggest notebook computer subcontractor, poses in front of Quanta headquarters in Taoyuan on Friday. Leung, who recently replaced outgoing president Michael Wang, says that under his leadership the company will do better.
PHOTO: CHO YI-CHUN, TAIPEI TIMES

C.C. Leung (梁次震), who helped turn a tiny computer company into the world's largest portable computer contract maker, has a new vision for this company's future. This time, the plan is to say goodbye to its conservative image.

"We will be a `flying turtle,'" said Leung, the new president of Quanta Computer Inc (廣達電腦), at an investors' conference in Taoyuan on Friday.

In the past, the computer maker had expanded its business via the "Turtle Philosophy," a term coined by company cofounder Barry Lam (林百里) meaning that expansion is done at a slow, low key yet stable pace.

"The philosophy is still our motto, but now this turtle will be flying sky high," Leung said.

The event, where the company's quarterly financial results were unveiled, marked Leung's first official meeting with the press after he was elected by the board to replace Michael Wang (王震華) on Aug. 24.

Leung, who cofounded Quanta in 1998 with Wang and Lam, said he expected to cope well with his new responsibilities. He also doubles as vice chairman.

The new appointment marks Leung's second time as president. He held the position for 13 years before handing over the responsibilities to Wang in June last year.

The company's organizational structure will remain unchanged, but the main priority will now be to "enable greater space so that every staff member can give full play to his or her talent," he said.

Leung will face an urgent task of retaining talent, especially following Wang's departure, which made the headlines in newspapers and sparked speculation on possible discord among the three pillars of the company.

"Wang, with his well-rounded sales background, told staff that the manner in which we sell products to clients is far more important than just developing top-notch products," a veteran magazine journalist covering the local IT industry scene said.

"He told the research team not just to design products inside the office cubicles, but to try to offer what clients really wanted," he said.

Wang's outgoing and strong personality and emphasis on sales led to Quanta's losing a number of research and development employees.

In March, Jason Lin (林群傑), ex-director of the strategic investment division and deputy spokesman of the company, confirmed to the Taipei Times that 20 handset researchers had left the company.

He said, however, that it is not unusual in the high-tech industry for employees to resign after receiving their year-end bonuses.

Lin himself has just left Quanta to go back to the securities industry.

"We will not hesitate to provide training and offer our employees more `humanized company management,'" Leung said, without stating concrete strategies.

Leung said Wang had decided to leave the company for personal reasons and wanted to spend more time with his family.

Leung told reporters he could manage the sales aspect.

"What the media said about my not having a strong sales background is false," he said.

Leung, a graduate of National Taiwan University's physics department, helped establish the company's research and development team in its early days.

He switched over to manufacturing in 1993 and has been involved in sales since 1996.

"I have had an enjoyable time dealing with clients in the US and Japan," he said.

With the soft spoken, meticulous Leung taking the helm, the industry will be paying close attention as the company attempts to cement its lead in the notebook production industry, where competition is firing up and profit margins are deteriorating.

Asustek ready to ship Eee PCs later this month

EASY DOES IT: The Eee PCs are mainly targeted at elementary school pupils, and the company expects shipments to total 300,000 by the end of this year

By Jason Tan
STAFF REPORTER
Thursday, Sep 13, 2007, Page 12

When Jerry Shen (沈振來), president of Asustek Computer Inc's (華碩電腦) open optimum platform business, recently went on an overseas business trip, his luggage contained three of the company's yet-to-be-launched Eee PCs.

The machines each measure 22.5cm wide by 16.5cm deep and weigh only 0.89kg. He used two of the units for business presentations, while the other was for his personal use.

The much-touted machines will finally hit the stores later this month.

"We look forward to Asustek starting to ship Eee PCs," Kirk Yang (楊應超), an analyst at Citi Investment Research, said last week.

Asustek plans to promote Eee PCs -- the acronym stands for "easy to learn, easy to work and easy to play" -- through three channels: the firm's current PC channels, government programs and telecoms operators.

"Selling via the PC channels means that Eee PCs will enjoy the same gross margin level as its own brand notebooks," Yang said in a report dated Sept. 5.

Promoting the PCs to government agencies would provide the lowest margins, while the cooperation with telecoms operators would offer margins inbetween the other two channels, he said.

The Eee PCs are targeted at elementary school children and parents who want to hook up with the information age. The first shipment consists of 10,000 units.

Total shipments should reach 300,000 units by the end of the year, and the plan is to ship 3 million next year, the company said.

"The launch is for worldwide markets, including China, the US, Europe and Asia-Pacific. We are not sure how many will be allocated to Taiwan," Asustek product manager Jose Liao (廖逸翔) said in a recent interview.

Promotional activities are still being finalized, he said.

Yang said Asustek would limit the Eee PC's screen size to between 7 inches and 9 inches and include a small-capacity flash memory module, to differentiate it from normal notebook products.

The Linux-based Eee PCs can also work with the Windows operating system, Yang said.

Despite Asustek's launch of the small and simple computer, larger rival Acer Inc is in no rush to hop on the bandwagon.

"It is a great idea, but it would have a better chance if it came out four years ago, when notebook prices were sky high," said Scott Lin (林顯郎), president of Acer's Taiwan operations.

For now, the competition among portable computers is "all about specifications and price," he said.

Currently, a notebook equipped with a Celeron 530 processor and an 80-gigabyte hard drive sells for as little as NT$21,900 (US$663), making it much more attractive than an Eee PC, he said.

Eee PCs use Intel's Dothan Pentium mobile processors and have only 4 gigabyte of flash memory, and will likely sell for about NT$14,900 on the local market, an Asustek source said.

Lin said Acer was not worried about low-cost PCs gaining a large share of the market.

"Computer makers such as Wistron Corp (緯創), Compal Electronics Inc (仁寶電腦) and Quanta Computer Inc (廣達電腦) all have similar products ready. We could easily bring this type of model to the market within three months," Lin said.

Quanta, whose One Laptop per Child (OLPC) project is viewed as a rival to the Eee PC, also said it was not worried.

"The low-cost PC pie is big enough for everyone to take a piece," Quanta spokesman Elton Yang (楊俊烈) said.

He said OLPCs, set to be shipped in the fourth quarter, are targeted at the low-end segment of the market in developing countries and would therefore not be in direct competition with the Eee PC.

Users have said their first encounter with an Eee PC has been an impressive one.

"The exterior design and quality is worth the price tag," said Liu Chia-ren (劉家任), a photojournalist with the Chinese-language Digitimes.

With mail and messenger services, Skype, Wi-Fi and universal serial bus ports, the machine's applications are good enough to cope with most people's everyday needs, he said.

"I think those who have seen and used the machine would certainly like to take one home," he said.