IN THE HOT SEAT: Swapping ships for chips

IN THE HOT SEAT: Swapping ships for chips

Alan Chen says growing up on an island explains why he studied shipbuilding at university. It turns out the island was Taiwan, home to 90 per cent of the world's motherboard production, so it wasn't surprising that he jumped ship for information technology and is now Australian country manager for motherboard manufacturer, Gigabyte.

What is your professional background and how long have you been in the role?

Alan Chen (AC): I have worked in the IT industry for five years and with Gigabyte for the past two. I came to Australia with my family about 18 months ago to establish the local branch office.

What is the main focus of your role?

AC: Sales and marketing are my main responsibilities and my focus is simple: to maintain Gigabyte's number one ranking in Australia for its motherboard and graphic card business. We have about 35 per cent of the 85,000 PCs produced per month. More than 80 per cent of our revenue comes from this business. I also look to grow our new products business which includes laptops, desktops, barebone systems and consumer electronic devices.

How is the Gigabyte channel set up?

AC: We distribute through Synnex for our Intel channel and Rectron Electronics for AMD. This means less channel conflict. Across Australia we have more than 1000 resellers. We use the computer component channel now but as we come out with more new products we may look to build other channels. Locally we have a team that includes five warranty staff, a technical support engineer and a sales person.

How will new processor and chip technologies from AMD and Intel affect your local business?

AC: We are in a supply chain based on Moore's Law that states CPU power will increase by 100 per cent every 24 months. Both CPU manufacturers are our vendors in this, along with Nvidia and ATI, so our roadmap of product development is very much related to these other vendors. For instance, we do a lot of R&D together with Intel. Last year, Intel focused on the digital lifestyle but now it is focusing on gaming and pushing performance. Intel can't sell its CPUs without our motherboards, as its own boards only have about 15 per cent of the Australian market, so we have a symbiotic relationship.

Will you be undertaking new channel strategies in the near future?

AC: We launched a new program on April 1 called the Gigabyte Channel Incentive Program. It is independent from our distributors and rewards resellers for their loyalty by giving them marketing development funds and increased sales support though our distributors. In return they have quarterly sales targets.

What are the main market drivers for your technology?

AC: Drivers include wireless, VoIP, online gaming, lower PC prices, MS Longhorn in 2006, new technology like dual-core and broadband. One of the main drivers in Australia is that the cost of broadband is going through the floor. What this means is that multiple PCs and networks will grow in people's homes. This has to spur PC sales. The desktop market is stable and laptops are growing. We have to take marketshare from our desktop competitors. It comes down to our pricing, channel strategy and service. That is another reason why we are diversifying. Bundling a wireless PCI card with a motherboard adds value to our channel and that will win market share from competitors.

How are market conditions at the moment?

AC: Market conditions are difficult. Our main focus is whitebox, which is not growing and it's facing increasing competition from multinational vendors such as Dell, HP and Acer. Our role is pretty simple: we must give the whitebox sector the best components to compete with multinational vendors.

What particular opportunities stand out in your market over the remainder of the year?

AC: Leveraging off our main business with a diversification strategy to create a one-stop shop is our strength and an opportunity for us, especially with graphics and wireless. A big part of my job is introducing the new range of products that we have been shipping since April 1. Another opportunity for our core business is the new BTX motherboard form factor.

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