Susan Myers

Susan Myers, director of research at THT Research, says projector technology may soon land in cell phones.

By Susan Myers and LY Yuan, THT Research

Also, the design preferences of Chinese consumers generally work to the advantage of South Korean brands, and to the disadvantage of Japanese brands," states THT Research analyst Susan Myers.

"These miscalculations can be explained by the fact that the Japanese companies have mainly staffed their China offices with Japanese managers who operate according to Japanese management styles," explains THT's Myers.

"In addition, there's the nationalist factor to take into account: when good quality and well-priced alternatives are available, Chinese consumers generally prefer, for all kinds of historical reasons, not to purchase from Japanese companies."

Succeeding in the China market takes more than a good product that works on the global market.Products need to be customized for Chinese consumers, serious attention needs to be paid to sales channels and branding, and of course companies should hope that their governments' don't start fighting with China, Myers advises.

"Most Japanese handset companies have encountered similar problems in China," states THT Research analyst Susan Myers.

"They've relied too much on R&D and phone quality, and invested too little in branding, advertising, and developing sales channels," said THT Research analyst Susan Myers.

"They've also failed to introduce enough models at a broad range of price points that appeal to cost-sensitive Chinese consumers.Also, the design preferences of Chinese consumers generally work to the advantage of South Korean brands, and to the disadvantage of Japanese brands."

"These miscalculations can be explained by the fact that the Japanese companies have mainly staffed their China offices with Japanese managers who operate according to Japanese management styles," Myers added.

"We're in a period of consolidation in many sectors of the industry," comments THT analyst Susan Myers.
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"Manufacturers often see M&A as the fastest way to expand market share," explains Myers."For example, in recent days, Teapo Electronic merged with Luxon Electronics and acquired 51% of Luminous Town Electric, making the group the largest aluminum electrolytic capacitors vendor in Taiwan."

"Other manufacturers, such as Hon Hai, rely on acquisitions to enter new businesses," says Myers."Hon Hai acquired Chi Mei Communication Systems in order to move toward becoming a major mobile phone ODM.That followed Hon Hai's purchase of a Motorola Mexico plant (including a four year contract to produce Motorola phones), Nokia's Finland handset casing facility, and Finland-based handset component maker Eimo (Hon Hai now supplies Nokia with handset modules and assembles Nokia phones)."

"Similarly, Hon Hai's acquisition of Ambit Microsystems made it one of the biggest global cable modem and WLAN suppliers; its acquisition of Antec Electric System Co., Ltd. moved it towards its goal of becoming a major supplier in the booming car-use IT parts and components business."

"Hon Hai recognizes that expanding increases its negotiating power with customers," says Myers."While Hon Hai's own-brand products often compete with its OEM customers, customers can't easily abandon Hon Hai because of their vast and deep purchasing relationships with Hon Hai and its invested companies."

"Other ODMs are equally cognizant of the need to expand and many choose, like Hon Hai, to do so through acquisitions," says Myers."For example, Asustek is considering acquiring WLAN maker GemTek, Asustek and Quanta have followed Hon Hai in opening units to provide products for the automotive industry, and UMC has acquired an auto parts company."

"Until recently, ODMs' main strategy for combating the OEM price-squeeze and falling margins was to expand production volume.Today, M&A seems to be a new weapon in the ODM arsenal and the relationships between OEMs and ODMs increasingly look like a meeting of Goliaths," summarizes Myers.
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Susan Myers, 312-224-8584

susan@thtresearch.com

Contact: Susan Myers, THT Research office@thtresearch.com pr@thtresearch.com +1-312-235-2673

Susan Myers, THT Research

office@thtresearch.com

pr@thtresearch.com


+1-312-235-2673

"We're in a period of consolidation in many sectors of the industry," said THT analyst Susan Myers.