Digital TV seen as the next big thing for tech companies

Taiwanese companies yesterday expressed their faith in the digital industry as a viable business for the future, if not the immediate future, in view of growing demand for digital televisions in the West.

At a launching ceremony for digital TV Special Interest Group (DTV SIG) yesterday in Taipei, company representatives said Taiwan's strong supply-chain expertise and manufacturing prowess would help the nation's companies surpass their counterparts in Japan and South Korea.

The organization, composed of government and research agencies as well as local manufacturers, aims to promote the nation's digital industry. The government has said it wants to reach its goal of digital-TV services in 80 percent of the nation's households by 2006.

"Taiwan has earned a reputation in integrated circuit (IC) and computer industries in the world, and the experience can help Taiwanese companies move to the digital TV sector, which combines both IC and computer technology," said Alan Pan (潘泰吉), general manager of the multimedia communications division at Tatung Co (大同), one of the biggest local electronics makers.

Pan suggested Taiwanese companies interested in exploiting the digital TV sector -- including high-definition flat-panel TV displays, digital tuners and other video appliances -- target the US market.

The US Federal Communications Commission in August last year mandated that by mid-2007, all TV receiver sets larger than 13 inches sold in the US must contain digital TV tuners, which is expected to boost development of digital television in the market, Pan said.

Against this backdrop, shipments of digital TV sets to the US are expected to total 33.5 million units by 2007, more than half of the worldwide total, the US-based market research firm InStat/MDR said in a report last March. InStat/MDR predicted the global demand for digital TV sets will reach 58 million at that time.

"This is a great opportunity for our high-tech companies," Pan said. "As long as they can work together to create more added value for the product such as turning the digital TV set to a home entertainment device by integrating computer and other home appliances."

However, Pan said local manufacturers should refrain from investing heavily on brandname building and using that brand image to gain more market share.

"In competing head-to-head with global consumer electronics giants such as Sony, Panasonic and Samsung, brand name is no longer a panacea in this digital TV sector," Pan said. "What consumers care about in the digital era is the content, not the box."

Anne Tien (田暐慈), an analyst at Capital Securities Corp (群益證券), disagreed with Pan.

"Consumers still have high loyalty to home appliances, so it will be easier to contract manufacturing for leading companies than creating a new brand," Tien said.