DAEWOO SEEKING TO RECAST ITS COMMODITY IMAGE IN DIGITAL AGE

At CES, Daewoo unveiled 42W ($3,499), 50W ($7,499) and 60W ($9,999) plasma TVs -- all sourced from LG Electronics -- with 1,000 lumens, as well as 15-40W LCD-TVs at $699-$4,999. It also took the wraps off 47W ($1,299) and 55W ($1,599) CRT-based rear- projection sets as well as 50W-60W LCD-based models ($3,999- $4,499) along with DVD-RW recorders, DVD/VCR combo products and HD decoder set-top boxes (STBs). “In the analog era people thought of us as an opening price point brand, but now people are spending $3,000 for products,” Senior Sales Dir. & Mktg. Mgr. Sean Kim said. “Spending $3,000 means everything for us, and we want to find some people that will have trust in our brand.”

Daewoo’s brand has largely been relegated to the low end of the U.S. market for much of its 30-year history as a CE manufacturer. It continues to anchor the entry-level price points for VCRs, direct-view TVs and other commodity products at Target, having bested Funai in an online bidding process last year. Daewoo continues to use its 14-year-old assembly DelMex plant in San Luis Rio Colorado, Sonora, Mexico, to churn out 25” analog TVs, combo devices and other commodity products, but may revamp it to produce LCD and plasma TVs, Kim said. Even in the digital era, Daewoo’s 42W with 852x480 resolution has been widely promoted at Fry’s Electronics, Best Buy and CompUSA in ads at $2,499, although more recently its retail has risen to $2,999.

Kim conceded Daewoo’s image overhaul would take time, perhaps until the end of decade, when most U.S. TV broadcasts were expected to be HD. Besides plasma and LCDs, Daewoo signed an alliance with LCoS microdisplay developer Spatialight last year, although there were no immediate plans for TVs based on the technology, Kim said. Daewoo has been down that road before, having licensed Actuated Mirror Array (AAA) technology from Aura Systems in 1996. It never introduced AAA-based TVs as Aura tumbled into bankruptcy and liquidated.

“We are working with them [Spatialight], but we are not dedicated to that technology,” Kim said. “We're looking at all kinds of technologies and we don’t want to put all our eggs in one basket.”

Daewoo’s cautious approach may be dictated, in part, by its financial struggles during S. Korea’s late-1990s financial crisis. Daewoo Electronics Co. made a brief run at buying Thomson Multimedia’s electronics business in 1996, then scrapped that plan as it grappled with $1.5 billion in debt. The company was renamed Daewoo Electronics Corp. and emerged as an independent company after restructuring its debt. In the late 1990s, Daewoo considered selling its electronics business to Walid Almoar & Assoc. for $3.2 billion. Daewoo Electronics then reduced overseas units to 15 from 52 and consolidated them into 4 global regions. With companywide sales forecast to hit $2.96 billion by 2005, Daewoo has projected 30% of revenue and 60% of operating income will come from advanced digital products. Daewoo started adding flat-panel TVs to its mix last year and set up a sales force targeting national retailers such as Best Buy and CompUSA.

To separate itself from its commodity-based past, Daewoo demonstrated the first results of a development alliance with Canada-based ViXS Systems on a wireless home entertainment system. Daewoo is using ViXS’ XCode II video processor and Matrix RF dual-channel 802.11a chipsets to develop technologies and products for streaming video over local area networks. Daewoo plans to have ViXS-equipped products available by the 3rd quarter, although pricing hasn’t been set, Kim said. At CES, Daewoo demonstrated delivery of video over an 802.11a wireless network using a receiver and server that fed video to a plasma display panel.