James Chu, ViewSonic

As the economy improvies and an oversupply situation continues in the LCD display market, ViewSonic Chairman and CEO James Chu believes that now is the time to strike. ViewSonic, Walnut, Calif., plans to become much more aggressive across the entire display spectrum and for the first time will contend in the low end of the LCD display market.

This means that solution providers will be able to effectively bid an all-ViewSonic solution across the low, middle and high endS of the market instead of augmenting a bid with low-cost displays from another manufacturer. In an interview with CRN Editor In Chief Michael Vizard, Chu identifies the trends that he says will make ViewSonic a force to be reckoned with in 2005 and beyond.

CRN: What's driving your company's commitment to compete more aggressively in the low end of the LCD display market?

CHU: Overall, the LCD display is becoming more popular and we see the cost dropping. And manufacturing capacity is increasing markedly. So we think the whole market will increase. ViewSonic is fortunate that we are at the center of the war in displays. We say the future is display central. The display is the center of all other things. But as the price drops, it becomes more of a commodity. So economy of scale will decide who will be the winner.

ViewSonic wants to make itself much more efficient and, in so doing, we can live with a much slimmer margin. If we can do that, our overall volume will increase a lot. ViewSonic has a very good opportunity now. We think we can be one of the best channels for moving that product for either PC displays or TVs. We think ViewSonic can grow very rapidly in the next few years.

CRN: Your rivals would argue that they can compete more on price because they own their own manufacturing plants while ViewSonic contracts out manufacturing. What's your take on that argument?

CHU: I've heard that claim now for more than 15 years. That statement is sometimes true when there is a shortage. A vertical player can reserve key components for themselves. But for the future, all the fabs coming on line means that any shortage issue for the long term is less likely. In an oversupply situation, owning your own factory can be a big amount of baggage.

CRN: What are your biggest concerns about being certain that ViewSonic can compete effectively in that environment?

CHU: I want to run this business much more efficiently. I need to work with all the panel manufacturers to deliver low costs, high technology and fancy designs. If we do that, growth can be greatly expanded. ViewSonic is very focused and committed to the channel. I think we need to control our expenses and efficiency and work with the channel to compete with the Dell model. That way our channel partners can grow with us.

CRN: How aggressive will ViewSonic now be in terms of competing with other display vendors?

CHU: ViewSonic is committed to high technology, best performance and competitive pricing. I think the role for many of our competitors will be very slim.

CRN: LCD display pricing for the last year has been falling steadily. Do you think a lot of buyers are sitting on the sidelines to see just how low prices will go?

CHU: That's true, especially in the last year. In the third quarter of last year, prices dropped 30 to 40 percent. But today, panel pricing is very close to costs. Some manufacturers are even below costs. I would say price is going to be stable from here, and there has even been some minor price increases. The price of 17-inch displays from now through the end of the year is going to be very similar. For 19-inch, it will drop slightly. When consumers finally see stable prices, I think that will generate huge demand.

CRN: As people continue to run multiple applications on their systems, will more people adopt two displays on their desktop in the future?

CHU: There are two directions people are going toward. One is toward two displays. The other is people are using a single 20-inch or 23-inch wide-screen display. The height of the display is similar to a 17-inch display, but the screen is much wider.

CRN: So how should people think about ViewSonic going forward?

CHU: We see that the future is display central. The display can be anything. It can connect to the PC or the TV. Quite soon it will be difficult to differentiate between a monitor and a TV. All displays can link to the Internet and HDTV. Every room should have a display. In the home there will be maybe up to three PCs, so every room should have a display. Maybe some rooms will have multiple displays.

The key is what is behind the display. People don't need to know what that is. They just need to know they can access key information, data and video. It's about having a visual gateway that can download information over wires or wirelessly. When you can see information with that kind of detail, it changes the way people think about displays. ViewSonic wants to be the technology interface for people.