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Humax Previews Set-Top, Display Plans To Dealers

Humax, a South Korea-based manufacturer of set-top boxes for the global market, is using off-site meetings at the Las Vegas Hilton during CES to introduce dealers to its inaugural line of set-top boxes and flat-panel TVs for the U.S. market.

The company is planning to deliver by the fourth quarter of 2004 at least three set-tops based on TiVo’s digital video recorder system, and will have at least three models of plasma and LCD-TVs with “unique integrated features.”

With headquarters in Santa Ana, Calif., sales of Humax U.S.A. will be directed by Tony Goncalves, sales and marketing VP, who previously handled product development for Samsung and Sharp. He reports to Humax CEO Dr. Dae Gyu Byun.

Goncalvez said that in the United States, Humax will focus on two specific categories — flat-panel TV and DVRs “to jump start our diversification into consumer electronics products.”

As a leading manufacturer of set-top boxes, Humax’s “ultimate goal is to integrate set-top box technology and feature sets into its LCD TVs,” Goncalvez said. “We are doing that in Europe now, and it is doing very well. Here in the United States, it is a little more complicated.”

Satellite TV isn’t a common standard. We are keeping our fingers crossed that cable will become a common standard. ATSC has become a common standard and like it or not, we have to integrate that into TV displays.”

To launch, Humax will carry “three to four SKUs of TiVo products” by the fourth quarter of 2004, Goncalvez said, with plans to also add flat-panel TVs.

Although Humax declined to detail product specifics prior to CES, Goncalvez said flat-panel TVs will consist of both plasma and LCD TV series, and the company will have “three very targeted SKUs.”

In each segment, the company plans to offer both HD and SD-level panels, and will include integrated ATSC tuners in the HD versions.

The displays will feature an industrial design, and a full complement of inputs on board, multi-source PIP, and a Humax-designed image-enhancement engine.

Humax, which does not manufacturer flat-panel displays, is looking at multiple sources from multiple regions for its source of components, Goncalvez said.

“We will pick the appropriate panel for the appropriate SKU,” he said. “When we decide to have a high-definition plasma model we will probably pick a panel from Japan that is a little higher end. When we decide to do one that is enhanced definition, we will probably choose something out of Korea. Our intent is not to go and source from China just yet.”

As for retail distribution, Humax is initially targeting independent and regional accounts through a rep force and two-step distribution for the custom-install market segment.

“That’s not to say that we aren’t targeting nationals, but we want to be careful how we position ourselves,” Goncalvez said. “You can start at the top and come down, but you can’t start at the bottom and go up.”

The plan, he said, is to have products that are specific to different distribution segments.

Humax will build its reputation in the United States around the knowledge and experience that its parent has gained in serving set-top boxes to other markets in the world, and in product quality, Goncalvez said.

“In flat-panel TV, in particular, we will be bringing unique features that will give the dealer something to talk about,” he said.

In marketing, he said Humax “is going to try to be creative with promotions. We are going to do some interesting things with partnerships, just as we’ve done with TiVo.”

Humax, which is listed as earning $133 million in annual revenue, has allocated $60 million over the next two to three years for its product diversification initiative, with a significant percentage earmarked for brand awareness advertising and promotions, Goncalvez said.

Goncalvez said in launching its own branded line, Humax has no plans to compete directly with its OEM set-top box customers.

“The United States is the only place where we have an OEM relationship, and that was our entry into this country,” Goncalvez said. “Everything else we sell outside of the United States is either sold to an operator or sold under the Humax brand.”

The unprecedented volume of new manufacturers appearing with flat-panel TV lines in recent months is a concern in launching a new U.S. brand, Goncalvez acknowledged, but “it is also a positive thing that the market is getting so competitive. It creates opportunity, and means the market will grow.”

Goncalvez compares what is happening now in flat-panel TV (particularly LCD TV) with the start of the DVD player category. He pointed out that as more and more companies and brands introduced players, the market exploded.

“There will always be a sweet spot that is protected,” he said. “Our intent is to get as creative as we can with both product and distribution.”

Humax can be contacted at 1-866-humaxusa.