After 14 years at Mitsubishi Electric, Kathleen Flockton left her first job to become BenQ's GM for sales and marketing. She wants to take the company further into retail and continue to grow the channel, which accounts for 80 per cent of business.
The company is also pursuing the corporate/government space, and has rolled out a VAR program to entice partners into the area.
What are your current responsibilities at BenQ?
Kathleen Flockton (KF): I'm a bit of a jack-of-all-trades at the moment. I hire the staff, manage the sales team, look after the admin, deal with marketing, and talk to all of our channel partners and decide direction. I look at stock, and up until recently did product management duties until we hired people. It's been a long haul just to get the staff in the right places. I'm across the whole gamut of the business at the moment.
What product categories does BenQ offer?
KF: LCD is our core business and has predominantly been the strength behind the company - and what we are best known for in the channel. The latest IDC figures have us second behind Samsung. So that business is going from strength to strength each month. LCD TV, because of our strength in panels, is another product we're moving into. We have a 15-, 20-, and a 26-inch, and we're releasing the 30-inch shortly. And over the next six months we will have a 32-, 37-, and 46-inch LCD display. This will be a very strong push for us this year moving into the retail market.
We also have a notebook line, which we call JoyBooks, and have done a mini-relaunch with new models. We also offer projectors and are the largest DLP projector manufacturer in the world. Projectors are a very strong product for us here in Australia and worldwide. BenQ Taiwan's aim this year is to be within the top three manufacturers of projectors in the world including LCD and DLP.
DLP is starting to take off and eat into the LCD market. In LCD projectors, they use little LCD panels, so they can get burn-in on them, whereas DLP uses a colour wheel [they don't have the LCD panels in them so you don't get the issues of burn-out, as a result the life of the DLP projector is longer, and they are better for smoking environments including pubs and clubs because the panels don't get discoloured].
What were some of the main trends to affect the BenQ business this year?
KF: Everybody is touting this convergence word around the place. LCDs had a rocky road and were in shortage earlier in the year so everybody enjoyed higher margins, and sales were good. We were one of the lucky vendors that had no LCD supply problems. Obviously, the market is very different today. There's an oversupply, prices are coming down weekly and we have issued new prices every week for the last five weeks.
The other technology shift is LCD response times are getting quicker. We were first to market with 16ms and second to market with 12ms. And, hopefully, in Australia, we will be the first to market with 8ms. Response times are moving, and prices are continuing to fall.
With price drops every week, it's been hard for the resellers. They are a little bit cautious and not a lot of them are holding a lot of stock. I think as prices come down it will eat into the CRT market. And LCD is a much higher price than a CRT so revenue could increase as a result of the move towards LCD.
I'm hoping the pricing starting in Q1 through to Q2 will stabilise. We are hoping the demand for LCD TV panels will hold the LCD price decrease.
With the uptake of LCD TVs replacing old conventional TVs the panel oversupply will no longer be such an issue.
Are we ready for the digital home concept?
KF: We haven't really begun to see true convergence products. People talk about LCD TVs being a convergence product because you can plug in a computer, but realistically to me it is still a television. The resolution is not ideal for computer usage - and I wouldn't want to be sitting in front of a 26-inch LCD TV on a computer all day. Down the track developments such as LCD TVs with built-in DVD recorders and media centre being built-into DVD recorders will start to drive some of that convergence. I have seen some talk of products overseas on testing beds, but I have yet to see a lot of what I would class as true convergence products. But we'll be moving that way, and it will be interesting to see what happens to channels and retailers.
What is BenQ's strategy in helping partners get into the emerging market?
KF: We class ourselves as a leading lifestyle device provider. With all of our products, we try to put a little bit of play in most of our products (our notebooks have a remote control that come with them). At the moment, the way the market is you have to support all three categories. You have to support IT, AV and retail. The main way you do that is in segregating product. When true convergence product comes out, it could fit into either category. At the moment, the lines are still fairly defined. LCD TV belongs in the lifestyle TV sections. I think IT people are tech-savvy and a lot of products still need support. And your AV specialists, with their higher-end projectors, still have a place. But moving down the track, with all of the convergence products, when you have a television that has an IT component, I don't think we will be dictating where that product goes.