The Hindu Business Line : Gee, it’s ‘Eee’

The most valuable thing in Andrew Tsui’s bag, when we recently met in eWorld premises, was a brand-new Eee PC. “Yet to be launched in India,” he said, opening what looked like a shrunken version of a laptop, weighing less than a kg.

Only weeks earlier, the product had hit the shelves in Taiwan, Asus’ home turf. “The first 150 or so units were bought by our rivals to dis-assemble and find out what we have done,” reminisced Tsui, over a leisurely South Indian lunch in Chennai. “At least for the next nine months we don’t expect any competition to our Eee PC.”

He is the managing director of Asus India, Mumbai. And he has big dreams. Such as, “To develop Asus India as an organisation that would survive as a perpetual entity beyond his own life.” Passionately, he declares, “I hope to establish the company under the root of integrity, honesty, humble attitude, diligence and courage. It should enhance value for the customer and deliver technology for a better life.”

We have a long chat, during which he deals with topics as varied as the Sensex charts and China costs, his Hindi vocabulary and Hong Kong movies… Thereafter we continue the conversation over e-mail.

Excerpts from the interview.

How extensive is Asus’ presence in the Indian market?

Asus products are sold in 47 cities, through 3,500 IT (information technology) channel partners with 11 different product groups covering notebook, LCD (liquid crystal display) monitor, PDA (personal digital assistant) phone, motherboard, graphics cards, optical disk drives, wireless LAN (local area network), network switch, gaming chassis and power supply.

Each product has gained good acceptance from the market with growth rate ranging from 30 per cent to 150 per cent item by item. Since the products are of various 3C (computers, communications, and consumer electronics) solutions, we find respective competitors across different categories; but overall Asus is providing very unique solutions with high quality and performance.

Is the rupee appreciation vis-À-vis the dollar making an impact on your operations? How are you handling it?

The rupee appreciation does add unexpected cost to our operation by 10-15 per cent. Fortunately we have purchased our corporate office in Mumbai, hence we also get a counter-balance from the price appreciation as well as monetary exchange benefit. Overall, we are not much impacted by the rupee appreciation effect but get some substantial benefit in company assets.

Do you see India only as a market? Or do you have plans for tapping manpower and also setting up manufacturing facility in India?

India, with its many States and union territories, is like many markets in one country. We are seeing each metro and ‘A’ class city as an independent economic unit. Due to the unique environmental and infrastructure difference from city to city, we have started recruiting top R&D (research and development) engineers from India’s top 10 universities and master programs to relocate to work in Taiwan. In the near future, if the number of engineers increases sharply, we may possibly plan to set up a local research lab. The manufacturing plan is always a consistent subject to expand our capacity of production by providing in-time logistics at competitive cost. India, as one of the biggest markets as well as its unique geographical location, is always on our list of consideration.

What have been the trends in the motherboard sector, as compared to other sectors in the IT industry? Also, your views on the duties/taxes in India.

The motherboard industry has gone in for the following:

More energy saving.

More performance in graphic process and large size memory support.

Smarter to detect the system loading, and devices connected to generate optimum function.

More visual assistant devices such as duo screen designed to show message on an independent panel and more assistant connectors to connect exterior devices from a composite box.

More proactive and efficient heat dissipation mechanism while reducing the noise of system fan with a fan-less design.

More environment-friendly process of manufacturing as well as material adopted for production.

The duty/tax structure on the motherboard hasn’t changed much as compared to last year, but the rupee appreciation has made the import cost average 10 per cent lower than the same time as of last year. If the government decides to lower the aggregated tax on the motherboard, it will give the whole society a better chance to adopt better technology at a cheaper cost.

Asus is diversifying into products other than motherboards. What are the reasons and plans? Are your products such as mobile phones, LCD TV, and modems sold widely in India?

Asus is a globally renowned 3C company. Of course IT category is our strongest point, but revenues generated by motherboard have reduced to less than 30 per cent in 2006. In India, we are selling less of end-user products such as LCD TV, modem, etc, due to lower brand awareness; also, competitors are waging cutthroat pricing war. So, we would look at a more appropriate time to offer those products to the market.

On the other hand, our end user products such as notebooks, LCD monitors, PDA phones, wireless products, etc, were recently introduced in the India market and have been well accepted. We started off targeting the premium segments and are gradually percolating down to the mainstream and entry-level segments.

What is the market you are targeting with the new product, Eee PC? How would the experience be different from what one is used to with laptops? Considering the size and weight of Eee PC, would it be the right fit for women? Or, do you think their preferences are different?

Eee PC is a unique concept of creation. Focusing on user experience as a priority, thorough technical understanding on both hardware and software design was implemented, with topmost professional manufacturing capability to give the best finished product at a very affordable price range.

The Eee PC is based on the ‘easy’ concept. It’s easy to learn, work and play. It enhances the enjoyment of Internet surfing, helps school work in science and mathematics, has an authentic stereo system on for playing MP3 or video clips, convenient communication tool on MSN and Skype, with an immediate e-mail sharing browser and in-built web camera (factory option).

It gives most of the functions a user may need on a PC plus an agile mobility to carry around. Especially the solid-state disk (Flash type) storage can avoid hard disk crash problems. For a user who wants more storage space, Eee PC also provides threen high-speed USB (universal serial bus) 2.0 connection, and one SD (secure digital) memory slot.

Your views on how India can be a manufacturing destination for electronic goods, compared to other countries where you currently have plants. What are the skills where India scores and the ones where we lack?

It took China almost a decade to turn into a manufacturing country, while Taiwan IT companies have invested continuously tens of billions of dollars to boost up that foundation. It’s not easy to predict the future of India since foreign investment into manufacturing is still exponentially smaller while major manufacturers haven’t set up their foot locally. With the rising R&D costs and oil price, when transportation cost and labour cost become higher in percentage, IT manufacturers will eventually make their way to India.

Does e-commerce form part of your sales strategy?

E-business is not our sales strategy, but in certain countries such as the US, Korea, and Japan we do have close collaboration with the local e-retailer shops. The IT platform provides us with a good communication and data mining as regards our overseas business partners. We would, therefore, rather use IT as an information collection than materialising the same into business, so as to avoid channel conflict.

How does Asus promote and nurture innovation? Also, on IP (intellectual property) creation and patents.

We have a legal department for IP application in case any engineers have made inventions or important improvements on technology. We also partner with advanced IT companies to continue innovative invention for better performance and efficiency.

Is the environmental aspect duly taken care of during manufacturing? Are there initiatives to ensure that electronic waste (from discarded gadgets) is effectively managed?

Manufacturing ethic on environment is an international propaganda as well as a compulsory requirement for the IT industry. Asus is the first vendor to get the TCO99 certificate with a solid green policy. In a recent survey and ranking, Asus is on top of grade ‘A’ in IT hardware design and manufacturing.

We take a serious view of eternal livelihood with our descendants and the earth. When designing products, our R&D people start thinking of how to reduce the process of production to save energy, how to reduce waste material by saving resources, how to avoid using toxic solvents and chemicals to save the earth, and how to adopt recyclable materials to elongate the resource life.

To fully implement the green policy, we have a dedicated department that preaches and administers the implementation of the policy. It’s not an easy task but Asus considers it as a mission for the betterment of human kind; therefore we strive to fulfil our oath without any compromise.

Andrew Tsui completed his degree in power mechanical engineering, followed by a two-year mandatory stint in the army. Then he completed his management degree and joined Asus. He was involved with Asus’ operations in Japan for about seven years before joining India for development and growth of Indian operations. Andrew Tsui, the senior-most sales person of the company in the Apac (Asia and Pacific) region, bagged the ‘best sales person’ award in the year 2000. He plays the bass guitar and likes listening to all kinds of music. He is also very proficient in Japanese, Chinese, English and a bit of German. He is currently attempting to learn Hindi as well.

About Asus

Asus ( www.asus.com), as you may know, is a world-leader in motherboards and also a major player in graphics cards and notebooks. The company has more than a lakh staff, and its turnover for 2006 was $17.4 billion; current year, it is expected to be around $23 billion.

Many may not be aware that the company’s name comes from “the last four letters of the winged horse Pegasus, which in Greek mythology represents the inspiration of poetry, art and learning. The winged horse has come to be a symbol of strength, creative spirit and purity,” as Asus’ profile explains.

A paragraph titled ‘Asus culture’ informs that integrity is the backbone of its corporate culture. “Since the last year, integrity has been officially included in Asus’ performance evaluation.”

Interestingly, Asus’ employees have to grade themselves based on five qualities. These are: modesty (don’t take all the credit, no one can succeed without the help of others); honesty and loyalty (become a person whom others can count on); diligence (success only comes with hard work); perceptiveness (pay attention to your surroundings and develop the flexibility to handle changes); and courage (welcome challenges and don’t be afraid to admit your mistakes).

dmurali@thehindu.co.in

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