Thu, Jun 03, 2004 - Page 10 News List

IT sector encouraged to move beyond ODM

By Amber Chung  /  STAFF REPORTER

A model displays her nails decorated by an inkjet printer during the Taipei Computex 2004 show yesterday. The inkjet printer, developed by ImagiNail Corporation, a company based in Florida, allows users to quickly and accurately apply millions of colors and virtually any design directly on natural or artificial nails. The ImagiNail system consists of NailJet Pro, a full line of nail coatings designed especially for the NailJet Pro process, and a library of nail art.

PHOTO: AP

To tap the emerging global market for digital consumer electronics, Taiwan should utilize its unique position and advantage in original design manufacturing (ODM), industry veterans said yesterday.

"Taiwan has demonstrated to the world that it has successfully transformed into ODM from OEM [original equipment manufacturing], which means that it is no longer just a manufacturing base but a research and development center," Texas Instruments Inc's Asia president Terry Cheng (程天縱) said at a forum.

US information technology companies that plan to enter the digital consumer products market and Japanese companies that want to keep their leading status in the sector both benefit from Taiwan's ODM strength, Cheng said.

The forum, organized to coincide with Computex Taipei 2004, was also attended by Quanta Computer Inc (廣達) chairman Barry Lam (林百里), Chunghwa Telecom Co chairman Hochen Tan (賀陳旦) and Toshiba Corp vice president Atsutoshi Nishida.

Merely transforming from OEM to ODM was not enough to make inroads into the consumer electronics sector, Lam said, so the nation's IT companies should further evolve into innovation design manufacturing (IDM) to catch up with the demands of the market.

Demand for consumer electronics with home entertainment features -- like camera phones, digital cameras and liquid-crystal-display televisions -- has been on the rise, helping boost global IT spending by 6 percent to US$924.3 billion this year, the Taipei-based research house Topology Research Institute (拓墣產業研究所) forecast early this year.

Eyeing the great potential for growth, local IT companies have been jumping into the sector in droves in recent years and the output of Taiwan's consumer electronics industry is expected to reach NT$1.02 trillion in 2008, Topology said.

However, IT companies have to modify their focus on personal computers to be successful in the consumer electronics sector, Cheng said.

"`Easy to use' is the most significant element of consumer electronics," Cheng said.

Distribution is another element of success, Cheng said, adding that promotions and channels that function well in selling PCs do not necessarily work well for consumer electronics.

Quanta, the world's largest notebook computer maker, started diversifying its product lineup two years ago and plans to speed up its expansion in the home entertainment market using its strong research and development capabilities, Lam said.

Quanta is expected to ship 10 million handsets to its clients including Panasonic Mobile Communications Co and Siemens AG, up from 6 million units last year. It also expects to ship 200,000 LCD TVs this year, a 10-fold increase over last year.

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