'MADE IN TAIWAN'

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Remember when "Made in Taiwan" meant cheap and cheesy? Get ready for a 180-degree turn.

Just as in the late `90s when Korean companies like Samsung and LG Electronics longed to be the next Sony, some aggressive Taiwanese companies are baring ambitions to be the next Samsung. Electronics brands like BenQ, Tatung and D-Link are changing Taiwan's image as manufacturing assemblers. They're taking local success in Asia and, backed by aggressive business strategies, moving to the world stage. Thanks to them, Taiwan is emerging as the next Korea of consumer electronics.

"Taiwanese tech brands have always had this dream to set up under their own brands. Now their success in China has given them this appetite for the West," said THT Research analyst Y.D. Gordon.

BenQ in particular seems to be swiping a page from Samsung's playbook. Samsung rose to prominence by attacking the low-end of the market, selling inexpensive cellphones to hip young people. Those influencers became brand loyalists and not only grew up and bought up to higher-end Samsung phones, but also snapped up mod-looking TVs, LCD monitors and even appliances. And now here comes BenQ, which just bought Siemens Mobile, a failing wireless-phone division. Expect a similar stealth play using flashy designs and innovative features at a low price on co-branded BenQ Siemens phones as it looks to build its own class of brand buddies. News reports of the deal have already pushed forward the BenQ brand, born only three years ago as an Acer Group spinoff.

"Through the acquisition of Siemens Mobile, BenQ has created a platform from which it can build a global brand. Clearly, this gives it the critical mass and distribution to drive their brand further than what they were able to do prior to the acquisition," said Hong Kong-based Michael Wood, managing director, Hong Kong & China, Publicis Groupe's Leo Burnett Worldwide, which handles BenQ's global advertising.

Not all the Taiwanese brands with aspirations will succeed; however, it is likely that within the next decade, several of them will rise to become a familiar brand on U.S. shelves.

Much of the West already owns a computer or electronics device either partially or entirely made in Taiwan. Consumers just don't know it. The island of 22 million boasts manufacturing market shares of 70% in notebook computers, 80% in LCD monitors, and 34% in digital still cameras in 2004, according to THT (formerly TaiwanHighTech.)

Taiwan-officially named the Republic of China-seems in a better position than the mainland People's Republic of China's brands like Lenovo and TCL, who are also trying to expand globally. That`s partly because China's communist government, while keen to go global and willing to spend to do it, deters by its definition any understanding of how to brand and market, while Taiwan has long been a global-market participant. Most in China would rather become manufacturing powerhouses building and selling products rather than branding experts. Taiwan, on the other hand, is maturing its tech business and moving manufacturing offshore, mostly to the mainland.

Still, not all Taiwanese companies are eager to ditch behind-the-scenes profits for a shot at world recognition. Some, like the giant Quanta, which makes computers for Hewlett-Packard and Dell, have indicated they're not willing to risk those relationships to push their own branded products.

Even Tatung, one of the better known Taiwanese brands thanks to its place on Wal-mart shelves, is debating its U.S. strategy. "We're still trying to figure it out," said Alan Pon, a Tatung senior general manager. "But we're definitely learning from the domestic market in Taiwan and our markets in Europe.

Another challenge Taiwanese companies face-and which they are quite aware of-is cultural differences.

18 YEARS OF BRAND BUILDING

"Brand marketing is not done in the same big way as it is in U.S. Brand attributes are quite different, even retail is done very differently," said analyst Rob Enderle of Enderle Group. "They will need to have design houses in market and they'll need to build up marketing resources in the U.S. instead of just trying to translate what they've already got."

Acer, the grandfather of Taiwanese tech, is also one of the only ones to have reached that Western brand recognition the newbies are looking for-something they've been working on since the brand was established in 1987. The new wave may not take that long to become established, but it also won't happen overnight. Like Samsung and LG, which dabbled and experimented in markets and products before jumping center stage, the Taiwanese exporters are experimenting.

So if the entrants face a competitive market, a foreign marketing environment, and super-tight margins, why bother? It's all in the potential.

"There's not room for more than a couple or three in the market," said Gartner/ G2 analyst Van Baker. "Just two or three will rise to the top and realize some level of brand recognition. They need to remember that Samsung spent a lot of years and a lot of money getting there. ... But there are a lot of pluses if you can pull it off."

contributing: normandy madden

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