ViewSonic Corp., a seller of computer monitors based just over the northern county line in Walnut, has no qualms about taking on rivals, even big ones.
Take ViewSonic’s opening salvos into portable computers and flat-panel TVs in 2003, which pitted it against Sony Corp., Toshiba Corp. and Samsung Electronics Co.
Now ViewSonic is setting its sights a little closer to home, taking aim at a couple of Orange County companies.
ViewSonic is pushing a new line of home networking gear,devices that link together TVs, computers, DVD players and other items.
The wireless devices allow you to mesh computer and consumer electronics without running wires everywhere.
The products put ViewSonic squarely on the turf of Irvine-based Linksys, a unit of Cisco Systems Inc., and D-Link Corp., a Taiwanese company with its North American headquarters in Fountain Valley.
ViewSonic dismisses notions of stepped up competition with Linksys and D-Link. Instead, it sees its new products as a way to broaden its mainstay monitor business, according to Christopher Franey, president of ViewSonic’s North America division.
“ViewSonic has been a display company,that’s our heritage,” he said. “Our focus isn’t in the data wireless market. We’re much more interested in visual networking.”
But there’s no denying the competition. In September, ViewSonic hired a former D-Link executive, Greg Avera, as general manager of its wireless networking products. Avera worked for ViewSonic earlier in his career.
ViewSonic unveiled nine wireless networking devices back in September. The company describes the move as a “multimillion-dollar effort” that seeks to play off ViewSonic’s ties with distributors and retailers.
To be sure, ViewSonic has muscle to leverage. The company counts yearly sales of $1 billion and has been expanding beyond monitors for the past few years.
Since 2000, the company has come out with video projectors, high-definition TV monitors, portable tablet computers, speakers, keyboards and wireless mice.
A spokeswoman for Linksys said the company is aware of ViewSonic’s efforts but isn’t worried.
“It’s hard to view them as a direct competitor since we don’t have all the same products,” the company’s Karen Sohl said.
Like Linksys, ViewSonic has a big backer. Intel Corp. has made two investments in the company in recent years.
And ViewSonic has another parallel to Linksys, as well as other OC companies: It was started by a Chinese immigrant, Chief Executive James Chu, who built on ties to his homeland to develop his business.
A native of Taiwan, Chu taps Asian monitor makers for ViewSonic’s products.
If the story sounds familiar, that’s because Linksys founders Victor and Janie Tsao did the same thing. Their ties to their native Taiwan were critical in getting suppliers for the company’s networking products.
The same can be said of Fountain Valley’s Kingston Technology Co. and others.
ViewSonic’s move beyond monitors is a necessity.
The company, known for its logo with three colorful Gouldian finches perched on a branch, rode the computer boom selling traditional cathode-ray tube monitors.
Once those became commodities, ViewSonic started selling other monitors, including more profitable flat-panel displays.
But from 2000 to 2002, ViewSonic’s sales fell by a third, thanks in part to the technology meltdown and the recession.
ViewSonic is privately held but files quarterly results with the Securities and Exchange Commission because it has publicly held debt.
Sales have rebounded for the past two years. ViewSonic hasn’t yet reported its December quarter numbers.
The display business long has been marked by severe price swings thanks to cycles of shortages and oversupply.
The company la-ments this in a recent SEC filing:
“Late in the second quarter of 2004, the display industry saw a very rapid shift from a shortage of display panels to one of oversupply, which continued throughout the third quarter of 2004.”
Added production and slower demand caused prices for the company’s flat-panel monitors to fall by 18%, the company said.
That hurt profits, according to the company’s filing.
“As the market adjusted to the new lower prices, we implemented strategies to sell our older and higher cost inventory, including inventory write-downs and higher sales incentives,” it said. “As a result, our gross margins decreased.”
Flat panels made up 38% of ViewSonic’s monitors sold in the September quarter, the company said. Tube monitors were 46%. Other products made up 16%.
And ViewSonic has a tariff issue in Europe. The European Union recently added a 14% tariff to monitors imported there to match the one on TV sets.
Europe makes up about 20% of ViewSonic’s sales. Observers say the tariff will give an edge to companies that make monitors in Europe, including Royal Philips Electronics NV and some Asian companies with plants there.
“This change in tariff classification will make it more difficult to us to compete in the European Union and will result in a negative impact on our gross margins,” ViewSonic said in its SEC filing.
It’s against this backdrop that ViewSonic is going after networking products.
At the International Consumer Electronics Show earlier this month in Las Vegas, the company unveiled an ad campaign touting its move into other markets.
One ad features a guy with tattoos all over his body. The text reads, “I’m more than just a stockbroker; and ViewSonic is more than just the No. 1 selling monitor brand.”
At 2004’s Consumer Electronics Show, ViewSonic got some help unveiling its tablet PC. Microsoft Corp. Chairman Bill Gates cited the device in his keynote speech.
“We’ve played in the commercial desktop space for a long period of time,” ViewSonic’s Franey said. “Moving into other areas in the visual imaging experience is important. There are a lot of things ViewSonic has pushed itself into.”
