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Spin-off establishes its very own identity IN THE CEO'S CHAIR: KY Lee at BenQ. Source: Financial Times

Spin-off establishes its very own identity IN THE CEO'S CHAIR: KY Lee at BenQ.

03-17-2004

By PAUL TAYLOR
17 March 2004
Financial Times
Page 2
English
(c) 2004 The Financial Times Limited. All rights reserved

This week at the CeBIT technology fair in Hanover, the bright purple corporate colours of the Acer spin-off BenQ, one of Taiwan's rising stars, will be flying high. Here, K.Y. Lee, BenQ's chief executive, outlines his vision for the company he helped to found.

For many people BenQ is a new name, but it also has a meaning. We chose the name for Bringing Enjoyment and Quality to life - that is our mission. Although the name is new, the company has been established for 20 years. It was originally a subsidiary inside Acer where we pioneered the development of multimedia devices, but in 2000 we decided to separate from Acer because we had a vision. We realised that IT was beginning to enter the home and personal markets - actually we saw that opportunity before 2000, but the market wasn't ready then.

Initially the IT market was focused on business applications and the office where it has enhanced productivity, but personal technology can also be used to enhance mobility and provide much greater accessibility to information. We strongly believe that IT has to move from the business arena in to the domain of the individual.

In December 2001 we were spun off by Acer (which still holds a 15 per cent stake in BenQ). We were very well received by the market, I think because we focused on the technology for individuals. As productivity has grown at work, the amount of "free" time people have also grows. They need new technologies, such as multimedia storage and better displays in the home and wireless networking to bind these devices together - that is our concept of the digital home.

Eventually, we believe all the traditional consumer electronics devices in the home will converge and will be based on digital technologies. As this happens, companies with IT experience will have an advantage (over traditional consumer electronics companies).

In the short term, the traditional consumer electronics companies may have an advantage because they have strong (distribution) channels, but in terms of technology it is going to be digital. Consumer electronics companies also have experience with the different interfaces in the home, but when everything goes mobile and wireless their advantage will diminish.

We are basically a digital company with a computer heritage and lots of capability in multimedia and digital applications. In the digital home most of the innovation will take place in the living room initially and this will centre on the flat panel display - be it plasma, LCD or rear projection technology.

We have all these technologies in-house. We have a company (AU Optronics -a separately quoted company in which BenQ has a 15 per cent stake) that is dedicated to flat panels and ranks as the third largest panel maker in the world.

Last year we introduced LCD televisions and shipments of LCD monitors make up about half of our sales. In the future we believe the distinctions between TVs and monitors will blur. People will have the ability to upgrade by adding modules.

If you want a screen for the living room, you will buy a TV, but in the bedroom or the kitchen, I believe people will buy a more monitor-centric device and will then add other features to make it into another type of device. For example, we have new monitors coming onto the market with a 16 x 9 format and people can then add speakers to have better sound quality, a tuner to make a TV or even add a camera to turn the screen into a video phone using IP telephony.

It is very interesting. In the old days, when you bought a computer system, 80 per cent of the price was in the PC box, but in the future I reckon it will cost you at the most 50 per cent, and 50 per cent will go into the display, videophone or TV features. We are getting more display-centric, which is to our advantage.

At the same time we think the recordable DVD will replace the VCR and there will be a need for a media centre that can pull together all the multimedia information in the home.

We have no plans to build set-top boxes - that is an environment controlled by cable operators - but we will build the media server or media centre which will help consumers aggregate their multimedia information, to store, retrieve and record in the digital environment.

These media servers will pull all the digital multimedia content in a home together then organise its distribution via something like a wireless basestation. Content will be distributed from living room to bedroom or to kitchen over a wireless network, removing the need for cables.

We also have considerable capabilities in the mobile phone market, which we first entered nine years ago. Today we are the largest mobile phone manufacturer in Asia outside Korea and Japan. Currently we are selling handsets in Asia and Latin America. In Taiwan we are number three after Nokia and Motorola. Now we are launching our new smartphone in some European countries including Italy and the Middle East.

We are targeting the high end initially with our Symbian-based smartphones. Over time we will broaden our product offerings. Meanwhile, we have a full range of DLP (digital light processor)-based projectors, and we are a growing force in notebook PCs. Overall, I think we have managed to establish enormous brand recognition in a very short time.

K.Y.Lee was interviewed by Paul Taylor.

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