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CRN Interview: BenQ CEO K.Y. Lee

BenQ CEO K.Y. Lee spoke with CRN deputy news editor Jeff O'Heir Sunday night, on the eve of Taiwan's largest IT trade show, Computex, to discuss the company's plans to enter the U.S. home networking market with technologies that its solution provider partners can eventually integrate into business environments.

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CRN: In the U.S. BenQ is mainly known for its commercial products. What is the company's strategy going into 2004?

Lee: "Actually, we set up that strategy two years ago; to focus on the improvement of people's life quality. In the beginning, IT technology was invented or developed to improve quality in the office. Gradually, these new technologies were applied to personal use and in the home. In the home market, there are huge opportunities for technology to improve our productivity or personal-life quality. Initially, IT was for work, now it's for play. This working and playing are the two major themes of BenQ's strategy, to provide solutions for both of these worlds. We believe this technology can be based on the one source that BenQ wants to deliver to the market and we see personal digital devices as the driving force for IT.

What we can do in the home environment - with the traditional CRT TVs, the traditional home electronic products -- is to integrate them with a lot of information technologies. We see more companies following this strategy: Hewlett-Packard just launched 150 home products. We are working on digital TVs and we are the largest mobile phone company here. So we can integrate all this wireless technology with digital audio and video technology into the IT environment and become the standout company for home and personal products. We see multimedia technologies and wireless technologies as the two major driving forces to change the home and the personal environments."

CRN: Going into 2004, what percentage of your business will be focused on the commercial environment compared to the home environment?

Lee: "Frankly speaking, we don't think it's necessary to separate these two markets in the future. For personal products, there will be no difference whether we use them for working or for playing or for home and office. No difference. If you look at current personal products, like the PC, I don't think there should be any difference between the home PC and the business PC. People are using multimedia in many ways. The difference is in the back-end technologies - the server, whatever, an internet enabled infrastructure. But in the future, this server technology will be applied in the home also. Intel just announced a new home server platform from their developer forum. These office technologies will be adapted to the home environment. But, in the future, the home market will drive the development of it applications.

Asian people are changing their mobile phones every year and they use the same mobile phone for personal communication and business communication. No difference. So we don't think it's necessary to separate these two markets in terms of technologies. The difference and the challenge is how the system integrator can apply these technologies to these difference spaces."

CRN: How important are solution providers are to BenQ in driving, installing and integrating this type of technology into the home market?

Lee: "The system integrators have to learn more about the home environment in the future. Frankly speaking, it's simpler than the office environment but the devices today in the home are two generations behind. In the future, it will be reversed. IT devices in the home will be more diverse than in office environment, so solution providers have great opportunity to expand their business scope to the home environment, providing it with internet, networking, wireless technologies, and multimedia solutions. And, vice versa, they can apply the multimedia applications to the business users. I think it's a very good opportunity for the system integrator to work with BenQ to become our loyal partners to develop this market in both the business and home areas."

CRN: What more do system integrators have to learn to successfully drive those technologies into the home?

Lee: "Multimedia technologies, to cover video, audio, sound music, whatever. That will have to be adopted by the business users very soon. The second one is the applications for email, wireless, Blue Tooth, mobile phones. All those will be integrated into those solutions. Those technologies will hook the multimedia together. Solution providers should have more expertise in those to provide the best solution for home users. Then they can bring them back to office users. When our products are ready in the U.S., we'll definitely offer some training and support programs to help solution providers migrate to that business."

CRN: In the future, how much of BenQ's sales will be driven through the retail market as opposed to the system integrator channel.

Lee: "I don't know the U.S. situation specifically. Today, most of business goes through system integrators and business partners. We're very small in retail. So we rely on system integrators to develop our U.S. market."

CRN: Will that change? Are you going to be driving more product through retail?"

Lee: "Some product retailers are very interested in us, they are talking to us about distributing our product through them. I think that depends on the decision of our U.S. executives. But I think gradually when the new technology adapts to the home environment, it will create a huge opportunity for system integrators to expand their business to home market. The home will become the office."

CRN: Still, you can't deny the retail market.

Lee: "If the customer wants it, we have to support it. But we still have to rely on system integrators. The system integrators can help provide the better solution. This is a big opportunity."

CRN: You're up against stiff competition from very well-known brands in the home market. How is BenQ going to drive and increase its brand recognition?

Lee: "This is the biggest challenge in the United States for us. In the rest of the world we have very great reception, especially in Asian, and we're growing more popular in Europe. The USA will be the next area we put more focus on. When we have a complete product ready next year, we will do a very massive launch. Brand recognition is so important."

CRN: What different product lines will BenQ focus on to lead that charge?

Lee: "Today we just launched a whole series of notebook computers called the JoyBook. We believe people deserve to fully enjoy the merits of computing power, via audio, video and all the MP3 technologies. We further developed those functions."

CRN: How does the JoyBook differ from a regular notebook?

Lee: "We focused on improving the specifications for the multimedia environment. For example, when people watch DVDs on notebooks, they need a much brighter screen. Notebooks are typically designed to view office applications, like spreadsheets and Word files. You don't need a very bright screen for that. But to view DVDs, you need brighter screens, faster processing and greater sound effects. That will be the major trend for notebooks. We have to consider the other side of computing, not just for office jobs, but also for playing. The second one is that we have introduced a whole series of digital TVs, which are the multimedia gateways.

CRN: When will the JoyBooks launch in the U.S.?

Lee: "Next year. The second major line is digital LCD TV. Once the FCC standard is set in 2005, we'll deliver them to the U.S. market. We've been delivering them to the Asian market for several months."

CRN: Will the JoyBook act as the controller for all the different IP-based products in the home?

Lee: Not really. We need more IT products to control our personal environment. I think the JoyBook is just on of them. We see this as the digital hub, but we need some product called the mobile hub, which should be the smart phone. A PDA is not enough. It's not connected all the time. We need a separate type of hub to complete the whole networking life."

CRN: What is gong to make BenQ's LCD TVs different than all the others?

Lee: "First the brightness. You'll see our picture quality is much better than our competitors'. Second, we have some unique digital signal processing technology for processing video. Third, we have in-house LCD manufacturing (through its AU Optronics division). Screens represent 70 to 80 percent of the total cost of product."

CRN: What advantages does that type of in-house development give BenQ?

Lee: "There are a lot of technology interfaces between the system controllers and the panels. We do a lot of front-end design together with our panel company and we coordinate the functionality of the specific panels. We also have a lot of engineers working on these technologies. With both sides contributing together, we can provide the best benefits of the features."

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