In the first part, we covered the overall situation of Taiwan vendors' predicament, and the need for the branding push to actually make real money without having to drive for multi-million volumes every time. Here we look at the details and specific vendors, with their chances to make it all the way up.
So, the point of doing all the product research, design, manufacturing and delivery logistics effort for another vendor, just for that vendor then to capture lions' share of the product margin due to their 'branding' and sales connections, has hit the Taiwanese vendors – not just the biggies like Acer or Asus, who saw it a long time ago – across the board. If the Taiwan producers continue suffering in the low-margin model, no matter how thrifty they are, ultimately the products and the whole business will suffer. Then, we, the consumers, will suffer as well due to the reduced choice in the market from less businesses, and ultimately higher prices from those who survive the storm.
So, those of them who have unique values, should have a chance to leap to a higher level of success through some sort of global – or at least regional, here in APAC – branding.
What's worth branding?
Obviously, you can't just put a sticker with fancy naming on yet another 'me too' motherboard, PSU or a memory module, and call it a 'brand'. There were such tries before (look at Lian-Li casings, for instance) but without success. You got to have something unique, preferably from both product features / performance, and the design looks, to call it a special brand with attached higher price, of course.
Let's look at ASUS ROG (Republic Of Gamers). When, four years ago, I met Derek Yu, the original Asus ROG manager and the man responsible for the success of the initial, very good quality, ROG lines – anyone remembers the first Rampage Extreme? – we joked that ROG is a funky take on ROC, Republic of China, official naming of Taiwan. However, the combination of top performance with quality components, some really good OC records, and really unique product design, both from technical and looks points, kept ROG going even through internal Asus political thunderstorms, which still seem to rattle the company from time to time.
In some sense, the ROG brand is more successful than their 'Eee' netbook brand, even though the latter one had far more top management attention and funding. Simply, netbooks proved to be not much more than a short-lived fashion fad now replaced by tablets – at least that gave Asus a chance to re-use the 'eee' brand, even though the ARM Android tablets are fundamentally different devices from Atom netbooks.
ROG, up to now, has produced some of the best mainboards and graphics cards around, way above what you'd see in the reference designs in both features and performance, even though from time to time there were minor complaints about shortcuts on some of the products. The current Rampage IV Extreme mainboard and the MARS2 graphics card are a good example of 'cream of the crop' stuff. It's a pity that they didn't get top management go ahead for a dual Socket 1366 mainboard last time, as it would have been a worthy competitor to EVGA SR2 and made a lot of money in workstation and financial (high frequency trading) markets like the latter one unexpectedly did. I sincerely hope that, with our 'Shamino' there, we will see a dual Socket 2011 ROG board later this year at least.
In the same market, only Gigabyte has built similar loyal following for their mainboards. On one side, the UD general purpose series did compete well against ROG to capture many records of its own. Then, the last year's G.1 Killer gaming mainboard series, with the unique design and bullets embedded on the board cooling system, plus offloading the CPU from sound and network load by using dedicated processing for these tasks, attracted quite a good following, as a specifically designed GAMER, not OC enthusiast, sub-brand.
Another good example, in an even tougher market, are G.Skill and GEIL – a little similar sounding brands, even I was confused at the beginning. Memory module market is extremely hard to succeed in if looking at the enthusiast segment, especially if you aren't a part of the big memory chip market, like Crucial had backing of Micron, or bought whole wafers at once, like Kingston. So, G.Skill and GEIL both focused on very very high performance modules, especially in terms of latency. You've surely seen both vendors modules with extremely tight latencies quoted in their world-record announcements. It may not matter so much in the real world applications, but there are enough enthusiasts who would pay extra for the combination of best latency and bandwidth to get the last bit of performance from their systems.
To make even more of their brands like RipjawsX for G.Skill and Black Dragon for GEIL, they could try to focus on money-rich workstation markets and the above mentioned rich traders doing low-latency robbing of the world populace by stock market shenanigans, where they could provide very low latency ECC DIMMs with pre-programmed better latencies right in the SPD on the module, avoiding the need to have a special BIOS on workstations that allows latency modification, usually a very rare occurence. The value of these brands would then multiply quickly.
Another example where the company itself became a symbol of good brand for specific products are Antec and Xigmatek, two vendors famous for really unique casings and PSUs, as well as cooling systems. Their stuff does go at premium price, but the top end market segments attracted to them do justify the extra dollars with the quality and performance proven, as well as special casing designs, along the way.
(Almost) all is in the name
OK, Taiwanese are not native English, or other 'ang moh' language speakers. However, if creating an international brand, especially if aimed to be a large business, it pays to spend a bit more money to double check the meaning of the proposed brand in more than just a few languages. A good example is Qisda, an unit of BenQ which in turn was earlier spun off from Acer – still a very large multi-billion dollar company on its own. Yet, Qisda name is associated with the most vulgar word for female genitalia in much of Eastern Europe, which is the group's important market after all.
If it was a much smaller company there eons ago, like Trizda (triple of…), a small Taiwan board level vendor from the early '90s, it could still be understood – but even then, it is a typical case of mentally myopic 'save a penny to lose a dollar' thinking which did badly affect many Taiwanese branding efforts. The lesson for the Taiwanese: when finally taking the leap into the branding battle, spend a bit extra and do a compehensive name meaning check, it won't hurt!
Branding can strike back, too…
Back to Acer, or Multi-Tech, as we knew it still some 20 years ago (yes, that name change was justified and created a better , very successful global brand). Some years ago, soon after acquisition of Texas Instruments notebook business – the TravelMate line comes from that venture, by the way – there were massive complaints about poor quality of many Acer laptops, including from yours truly. The machines were overheating, even the letter markings on keyboards would go off after few monts of use, and the Acer ePower bundled software was giving more trouble than benefit. Overnight, Acer became a synonym for an undesirable laptop, something, I guess, corrected well by now.
ThermalTake's water cooling systems suffered the same fate ultimately, due to repeated leakage incidents, that led to less trust into the brand's water coolers. Similarly, their 'Expressar' attempt at fridge cooling also went nowhere, mostly due to the technical problems – the fact that the name sounded like those little breast milk expressors for women didn't help either. On the other hand, their 'Level 10' high end casing series did well, despite luxury-level prices and air flow peculiarities too.
There are numerous examples of Taiwanese initial branding successes and failures, that could take whole books to cover. The point is, that's the only way – branding can justify a lot of things like, for instance, easier sales of high end non-reference graphics card designs, or even completely new PC formats and architectures. Over time, we'll look more at specific success – and failure – stories of those vendors in this tough business.