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Talk of the Day -- Taiwan's branding efforts face challenges

2012/07/04 22:32:55

Taiwan's technology companies have played an important role in the global high-tech industry, but their efforts to survive as consumer brands have encountered serious problems, according to the U.S.-based magazine BusinessWeek.

The publication cited a statement issued by Beats Electronics July 2 announcing its acquisition of MOG, an on-demand music service, as an example to highlight the plight facing Taiwan's high-tech companies striving to establish their own brands.

California-based Beats is a high-end headphones manufacturer founded by rap artist Dr. Dre and veteran music executive Jimmy Iovine.

While Taiwanese smartphone maker HTC Corp. bought the controlling stake in Beats last August, the latter's latest statement did not mention that the company is part of HTC, one of the world's leading producers of Android-powered smartphones.

"The omission is just a small indicator of a problem that HTC and other Taiwanese companies face as they try to survive as consumer brands," the BusinessWeek wrote Tuesday.

Meanwhile, local media reports said U.S. software giant Microsoft Corp.'s decision to launch its own brand-named tablet computer could squeeze Taiwanese laptop and tablet makers' bottom line.

The following are excerpts from media coverage of challenges facing local technology companies:

BusinessWeek:

Taiwan is an important part of the global economy, thanks largely to its electronics industry, and the backbone of the industry has long been companies that produce computers, chips, displays and other components for others.

A famous example of a Taiwanese company that provides contract manufacturing services, without putting its own brand on the finished products is Focconn or Hon Hai Group, which makes iPhones and iPads for U.S. consumer electronics giant Apple Inc.

Over the past decade, HTC and a few other Taiwanese companies have tried to change the business model and move into the spotlight themselves by building their own brand names.

For a while, they enjoyed success. HTC was the top producer of Android smartphones while Acer Inc. and Asustek Computer Inc. made their way into the top tier of personal computer makers.

Their attempts at brand building, however, have hit a snag. HTC has faltered as consumers have swarmed toward two brands -- Apple and Samsung, while China's Huawei Technologies and ZTE have opted for inexpensive smartphones.

Against this backdrop, HTC saw its shipment in the first quarter of this year drop to 6.8 million units from 10.2 million units in the previous quarter.

On the PC front, Acer was hot before Apple launched the iPad. Acer owed its rise mainly to its dominance in netbooks -- small and inexpensive laptop-like computers -- but the iPad and Samsung's Galaxy tablet have blunted demand for netbooks and other notebooks.

In contrast, Asustek has seen its stock price rise 27 percent since the start of this year. That's mainly because investors are excited by the company's teaming up with Google to launch the new Nexus 7 tablet. But becoming junior partner to the American Internet search giant might not be a "long-term solution for Taiwan's struggling brands." (July 4, 2012).

China Times:

Microsoft announced July 2 that Steven Guggenheimer, a vice president who oversees the company's relations with computer makers, will leave the post and will be replaced by another Microsoft executive from the unit, Nick Parker.

The personnel reshuffle followed the software titan's unveiling of its own line of tablet computers dubbed as "Surface" late last month.

As Guggenheimer has been friendly toward local information technology companies, the personnel change has caused concern in the local IT sector.

Brand-name PC makers such as Acer and Asustek said they will cautiously watch follow-up developments.

Industry insiders said delicate relationships between Microsoft and local brand-name PC makers may undergo changes following Microsoft's decision to launch its own line of tablets for Windows 8.

Microsoft's move is aimed at directly countering Apple's iPad and lightweight laptops, but such a move could threaten other makers in the non-Apple Wintel camp, industry analysts said.

According to them, the entry of Google, Amazon and Microsoft into the hardware sector to get a slice of the pie in the lower-priced laptop and tablet markets could squeeze Acer and Asustek's bottom line in the long run. (July 4, 2012).

(By Sofia Wu)
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