In the hustle and bustle of the Computex 2007 trade fair, we managed to catch up with Brian Chung, Motherboard Product Marketing Manager of Foxconn for a little chat to better understand how Foxconn is progressing in the channel market and some of his thoughts on upcoming standards and trends.
Before we discussed about current progress, we talked about the deciding factors for Foxconn to enter the channel market. After all, Hon Hai Precision Industry (the anchor company of Foxconn Technology Group) is a very big OEM and ODM company handling tier-one and tier-two customers who are generally very big corporations. However Foxconn's aim of going into the channel market is to service customers that Hon Hai doesn't deal with traditionally due to the lack of proper infrastructure then. Explaining further, Brain said that currently in South America, Middle East and India, their clients are seeking this service model where Foxconn does all the board designs and manufacturing, but puts down their client's logos to enable them to sell it in their respective regions. This 'new' business is in fact even bigger than the tier-one and tier-two partner request needs as the clone market is almost always bigger. One of the biggest challenges in serving this segment is the need to be flexible as different countries having differing needs and demands and that's what the Foxconn channel arm is trying their best to manage while leaving tier-one and tier-two servicing needs to Hon Hai.
Interestingly, when we asked how Foxconn is going to differentiate themselves from the established channel vendors now that they've ironed out the process and are very comfortable producing various motherboard solutions, their reply revealed a different but very levelheaded direction. Motherboard makers have often capitalized on the glamour and spotlight of being an outstanding overclocker for any one segment. However, this comes at a cost to both the manufacturer and consumers. Foxconn would have to invest in expensive cooling solutions, tackle higher thermal dissipation needs and higher power requirements among others. Consumers have to spend time tweaking as well ensure that they've got the right cooling solutions as well, which is all added cost and time.
This doesn't mean Foxconn is shunning the overclocking enthusiasts segment - in fact, they just announced the Mars lineup that's attuned for this group of people. However for the vast majority of users, overclocking yields little gain with the already fast platforms these days. As such, Foxconn would be focusing on optimizing their motherboard's performance in every way possible - from ensuring right FSB speeds, tuning up of memory bandwidth, maximizing graphics card performance and tuning up signal timings to ensure very good performance. This ensures lower overhead cost to the product and the savings are then passed on to consumers while enjoying the maximized performance potential.
Taking this optimization focus a step further, they plan to optimize performance for various new games and release a BIOS specific to optimizing performance in them. Should a new game update come by, Foxconn's BIOS engineers would release another BIOS befitting the updated nature of the game. So this is a form of extended after-sales service that Foxconn hopes to roll out in the near future. In addition to this, they hope to bolster their after-sales and support functions to provide ready support to their motherboard even if a customer has purchased it two years ago.
Quality is another area that Brain touched upon and mentioned that Foxconn realizes the importance in providing quality boards to minimize customer downtime as well as repair support infrastructure on their end. Thus features like solid capacitors to ensure the board's longevity and reliability are some of the things in mind that Foxconn will increasingly infuse in their board designs from the top to bottom product stack. All these steps will ensure customers would be comfortable about using Foxconn's motherboards and secure customer loyalty.
Dwelling upon the company's current status with regards to motherboard market share figures, Brian mentioned that really depends on the country as they've differing performance figures for various areas. Their best standing comes in the Middle East and Egypt market where Foxconn is king, while in the China market, they rank second place. He also mentioned that Foxconn's overall year-on-year growth in certain areas can be as much as 100%, but it's not as big as its nearest competing vendors.
While he couldn't comment on Foxconn's main competitor, he did acknowledge that Foxconn is much newer than the other established players and that they look closely at the advantages of their competition and try to fuse their best practices within Foxconn - for example, ASUS' wide product diversity and Gigabyte's solid channel network.
From talking with various motherboard vendors, it's quite apparent that Intel based motherboards make up for the bulk of most shipments and it is no different here at Foxconn too. Brian maintains that they've good ties with Intel and carry a the full-lineup of Intel based motherboards for which most part of the last year saw the Intel 865G as their most popular choice. Of more recent times, the Intel 945GC and Inel 946GC chipset is gaining momentum.
When asked about his thoughts and impact of the AMD Phenom processors to Foxconn's motherboard business, Brian explained that at the moment Intel is very strong in many of its product lines (especially in the CPU and chipset department) and as a result they've devoted more resources to the Intel platform. Even so, they are hoping for AMD to make a comeback to keep the blue giant on their toes and keep the innovation chain moving. However they admitted that this year is looking bleak for AMD as they feel the products are launching too late. The information they have at hand suggests that AMD's new platforms and processors will take a long while (closer to the end of the year) before they make it to retail in quantity. Therefore Foxconn will continue to focus 80% of their resources to the Intel platform.
While Brian shared with us that he feels that the DTX standard is a good commercial solution, it's not much of a gain for consumers building such systems. Even if this was sold at a low price point, two issues prevail - lack of flexibility in both expansion and choice of processors as well as the cost of after sales (such as repair, replacement and other support matters) as this group of users is far smaller than the mainstream boards. Additionally, suitable DTX chassis, power supply and proper thermal solutions to enable DTX to take off are not yet in place. Because it's a non-standard spec as compared to ATX or Micro-ATX, these issues would have to be resolved if at all DTX is to succeed. For Foxconn pursing DTX motherboards, it's easy from a design point of view, but other factors mentioned would decide the faith of DTX in time to come. At the moment, they've no definitive plans but they are discussing the possibility.