Advantech Co (研華) yesterday shed light on its structural reorganization amid ambitious plans to tap into the market for next-generation cloud-based Internet of Things solutions.
Three executives in their 40s have been promoted to newly created vice president roles to jointly oversee new Internet of Things initiative over the next decade, the company said.
“The team members are still the same, but we will take to the field in a new formation,” Advantech chairman K.C. Liu (劉克振) said at an earnings conference in Taipei, adding that the new arrangement was designed to accelerate innovation and development.
Addressing rumors that he and president Chaney Ho (何春盛), who are in their 60s, would retire, Liu said that they would continue working full time at Advantech.
While the company surpassed its peers in the first phase of Internet of Things development centering on embedded platforms, it is to focus on building software and hardware integrated solutions platforms in the current phase of development, he said.
The organizational shift from a hierarchy to a “holacracy” will improve corporate functions, allowing the company to begin preparing for the third phase of cloud-based Internet of Things services, which is expected to take shape by about 2030, he added.
“As the technology matures, the Internet of Things space is where the next billion-dollar valuation unicorns will begin appearing,” Liu said.
He outlined Advantech’s plans to found up to 10 start-ups with academic and research institutions, as well as cooperation with established companies to create new Internet of Things solutions.
“We hope to match domain knowledge and data collected by established companies and organizations such as retailers, energy companies and hospitals with Internet of Things developers so that the two sides can join forces to create tailored solutions,” Liu said, adding that disparate efforts by developers have not led to widespread adoption.
“The company is transitioning from an industrial computer maker to a leading cloud-based Internet of Things solutions provider and technology facilitator,” he said.
However, Advantech does not expect a significant sales contribution from software, as its expertise is hardware, he said.
The firm’s software is sold as part of a solutions package at US$20,000 per two years for existing clients, he added.
In the first half of this year, net income rose 4 percent annually to NT$2.93 billion (US$96.5 million), with earnings per share of NT$4.2, while sales gained 3 percent to NT$21.41 billion, Advantech said.
Gross margin in the period dipped 1.1 percentage points to 39.5 percent due to costs related to a recent acquisition, company data showed.
Sales in North America in the first half fell 5.2 percent annually to US$189.3 million, accounting for 27 percent of total sales, the firm said, citing heightened competition and client adjustments.
The Greater China region became the firm’s biggest market with 32 percent of total sales, it added.
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