Taipei Times: Can you give us a glimpse of the 2005 outlook for the ever-changing electronics industry?
Lee Kun-yao (李焜耀): Visibility for the industry remains vague. Not a single company in the industry will be overly optimistic about the global economy next year in view of rising interest rates and surging crude oil prices [which could slow down consumer spending].
PHOTO: SEAN CHAO, TAIPEI TIMES
What's more, doubts [about recovery] in the electronics industry, with the LCD sector in particular, further dim that visibility. Conse-quently, BenQ (明基電通) is very cautious with every step we take, like most electronics companies.
Despite low visibility of the industry as a whole, we feel BenQ will still enjoy a big jump next year boosted by its own-brand business. We are seeing potential growth from Chinese market next year. [Editor's note: one-fifth of BenQ's own-brand earnings come from China.]
Our initial goal is to double our brand sales next year [from an estimated US$2 billion this year], but there is always uncertainty ahead.
TT: Can you elaborate further on what will be the major forces driving BenQ's brand growth for 2005?
Lee: We will have to count on Asian and European markets, which are the major markets for BenQ's brand business. We have made significant progress in the third quar-ter. BenQ became the world's No. 5 computer LCD monitor vendor in the quarter to September, up from the 11th position. More signs show that the growth momentum will carry through next year.
In China, a fresh wave of LCD computer monitor replacements for bulky cathode-ray-tub (CRT) computers is setting in to fuel demand in the current quarter, lagging two years behind the Taiwanese market.
Notebook computers will be another force pushing up BenQ's growth, as consumers increasingly favor laptop computers when considering buying a second computer.
China is one of the fastest-growing markets. The penetration rate of notebook computers among households remains low, while broadband technology has gradually gained wider popularity in hotels there. Those two factors make laptops enticing to Chinese people.
Chinese businessmen, particularly, spend lots time traveling around the nation. With a notebook computer along the way, they can enjoy the convenience of high technology on the run.
In addition to China, we also found that demand in Southeast Asian nations is picking up, such as in Thailand. We plan to set up more branches in the region next year.
TT: Some investors expect BenQ to start enjoying a substantial gain from own-brand operation in 2006 in terms of earnings after LCD TVs take off. Do you agree?
Lee: BenQ's LCD TVs are actually a hit on the market. But we believe the growth strength will come from all segments, from digital music players to handsets, rather than entirely from slim-screen TVs.
Besides, our gross margin will further improve [from a current 11 percent] next year as we strengthen our product portfolios. We plan to roll out more high-end products next year including a 46-inch LCD TV and projectors with high price tags.
TT: Gartner Inc recently boldly forecast that one-third of the world's top 10 computer vendors will disappear next year. If this consolidation materializes, those computer giants will have more power to expand their market shares. Will the shake-up in the global computer landscape affect BenQ's survival?
Lee: We look at the issue from a different angle. BenQ is in a separate segment, where consumers, rather than corporations, are our main target. We are seeing more opportunities to expand our market.
I believe Gartner's thesis was built on the fact that computers are increasingly becoming more like consumer electronics, such as mobile phones. In other words, purchasing power is switching to average consumers rather than corporations. As a result, personal computers with multi-functions, including entertainment features, will be more appealing to computer users.
BenQ jumped on the new computer bandwagon as the company was positioned a consumer electronics brand when it began three years ago. We concentrate on making trendy electronic devices with more functions in order to cater to the needs of individuals.
Global computer makers, on the other hand, which rely mostly on corporate spending on computers for growth, are losing their edge. Some have considered backing out of the market as they do not want to waste resources maintaining a money-losing PC operation.
International Business Machine Corp set a good example [selling its PC operations to China's Lenovo Group (
TT: I have a question about AU Optronics Corp (
Lee: We now have a module plant there [as the government only allows local TFT-LCD panel makers to assemble panels in China] We hope the government will relax its controls over labor-intensive sectors since part of the manufacturing industry in Taiwan needs workers.
We hope the government will impose as few restrictions as they can. Leave the decisions to corporate executives.
I believe most companies are pursuing the maximum interests of their firms and the nation, when they consider such investment. No single company means to prompt the worry about exporting core technologies overseas.
TT: As BenQ is now making second-generation (2G) mobile phones for certain European telecom operators, is there the possibility that your company will extend the partnership into advanced third-generation (3G) models?
Lee: Yes. We'll unveil our first 3G cellphone in Europe next year. But, we can't be sure about the timetable for the launch yet. The handsets are currently under a series of tests now. As this is our very first batch of 3G models, the test will take longer than usual.
The schedule will also depend on how fast consumers will switch to 3G mobile services. In the past year, the adoption of such speedy mobile technologies has been slower than expected, largely due to lack of killer applications.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
Nvidia Corp CEO Jensen Huang (黃仁勳) today announced that his company has selected "Beitou Shilin" in Taipei for its new Taiwan office, called Nvidia Constellation, putting an end to months of speculation. Industry sources have said that the tech giant has been eyeing the Beitou Shilin Science Park as the site of its new overseas headquarters, and speculated that the new headquarters would be built on two plots of land designated as "T17" and "T18," which span 3.89 hectares in the park. "I think it's time for us to reveal one of the largest products we've ever built," Huang said near the
China yesterday announced anti-dumping duties as high as 74.9 percent on imports of polyoxymethylene (POM) copolymers, a type of engineering plastic, from Taiwan, the US, the EU and Japan. The Chinese Ministry of Commerce’s findings conclude a probe launched in May last year, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports. POM copolymers can partially replace metals such as copper and zinc, and have various applications, including in auto parts, electronics and medical equipment, the Chinese ministry has said. In January, it said initial investigations had determined that dumping was taking place, and implemented preliminary
Intel Corp yesterday reinforced its determination to strengthen its partnerships with Taiwan’s ecosystem partners including original-electronic-manufacturing (OEM) companies such as Hon Hai Precision Industry Co (鴻海精密) and chipmaker United Microelectronics Corp (UMC, 聯電). “Tonight marks a new beginning. We renew our new partnership with Taiwan ecosystem,” Intel new chief executive officer Tan Lip-bu (陳立武) said at a dinner with representatives from the company’s local partners, celebrating the 40th anniversary of the US chip giant’s presence in Taiwan. Tan took the reins at Intel six weeks ago aiming to reform the chipmaker and revive its past glory. This is the first time Tan
RSS