The Vision Thing


14 April 2008


Michael Jones talks to Vincent Sollitto, executive chairman of the board and former CEO of Syntax-Brillian.


MJ: What long-term expansion plans does the board have for the company?

VS: In 2006, approximately 40% of sales were in China and 60% in North America. But having entered the large US national retailers – such as Sears, Target, Circuit City and Kmart – recently, demand has been so large that these retailers will dominate sales.

In 2008, we expect North American customers to account for approximately 80% of Syntax-Brillian’s sales. As we have moved to a more royalty-based business for China in the last year, we now envisage that Europe will be the second largest region for us, as we continue to build on the brand equity that we have establish in Europe via the Vivitar brand. We have to do things one step at a time though – you can’t attack the world on all fronts. A lot of leaders come to learn that.

MJ: What is the appeal of Europe for the company?

VS: It was a very tough decision to focus our activities on the flat panel display product market and on growth at Vivitar. Europe has the largest market for LCD televisions – but it’s also a very difficult market to break into.

The CEO of Vivitar Worldwide, Abbas Bhanji, has done an outstanding job of growing the brand, and it’s currently in a great position, with access to all of the key retail players. According to DTC (electronics and technology market research), Vivitar accounted for the third highest unit sales of cameras in the UK in 2007. Vivitar will move into LCD televisions in the last quarter of 2008, piloting first in the UK.

The European market requires a slightly more sophisticated design, which fits our strategy of then bringing the same design to the US to take into a higher end of the market by unifying the Olevia and Vivitar brands.

MJ: Your company outsources much of its production, yet in 2006 you opened manufacturing plants in Southern California and Nanjing, China. How do you find the correct outsourcing balance?

VS: We have a partnership with a company in Taiwan called DigiMedia, and what is very exciting about this is that we established a copy-exact model for the manufacturing process.

It’s basically a development line that we duplicated in Nanjing and in Ontario, California. We have a very high standard in terms of quality, and our return rate is half the industry average. We believe that’s because we do more testing at the back end of the line. We turned the Ontario, California outsourced facility from an empty warehouse into a successful facility manufacturing and shipping Olevia televisions in two months.

MJ: Were you surprised by the speed of this transformation?

VS: Yes, we were. But the copy-exact model works very well. It was very important for us because it opened the door for us in the December 2006 quarter (historically the largest buying quarter of the year) and enabled us to go out to additional contract manufactures, have them modify their facilities to incorporate the capabilities that we have to put in place, test equipment and increase the burn-in to four hours. In two out of three cases, we were able to bring contract manufacturers up to our quality level.

That is what’s very important about our outsourcing model. We have to have control over the manufacturing process and over quality. But because of the ramping that we are going through now – 250% growth – we couldn’t possibly build the bricks and mortar ourselves to allow that. So by having contract manufacturing partners, we are able to grow at this outstanding rate.

MJ: How does the quality assessment process begin?

VS: It’s a design concept. We start by designing the product with the consumer in mind. We have several features on our televisions that don’t exist on those of large manufacturers. We were, for example, the first to have a VGA input to every television, which allows a television to be a computer monitor – our software fits the screen perfectly. Secondly, we created the first USB interface to a television, which enables a consumer to go to our website and download software updates. It is very interesting that the larger manufacturers are now copying this.

MJ: Is this the way forward for bringing consumer electronics to market?

VS: There is a constant conflict between getting to market as quickly as possible and testing. If you can provide software updates, you can be more aggressive and bring more features and functions to market, and if you really do have a problem with software, it can be fixed in the field. The product doesn’t have to come back. In the old days, we tested things for six months, got really comfortable and then said: ok, the world can have it now. But that’s not how the world is any more.

MJ: How do you keep a competitive edge in this industry?

VS: It’s critical. The most important thing is to make sure that we spend enough time with the consumers in their environment, seeing what they like. Our very first large liquid crystal on silicon television was placed in my social club. We then asked people what they liked about it, and also what they didn’t like, what we could improve about the user experience. Understanding what people want is the most important thing. I believe this is why our flat panel LCD televisions have done so well. There are plenty of other value-driven televisions out there that don’t have the quality features or reliability that we have.

MJ: How is that message communicated from the top down?

VS: Our philosophy is to keep the company very horizontal in its organisational structure, and obviously outsourcing is a good way to do that, because you minimise the amount of people you have, the amount of management that you deal with and the vertical communication that you have to worry about. But also you want to increase the productivity of people. I worked for IBM for 21 years and for Fujitsu, where you have a thousand vice-presidents plus all the communications issues of reporting from one boss to another.

"Understanding what people want is the most important thing."

Our company is able to move very quickly. You can try to anticipate the consumer and have a far reaching strategy, but it’s much easier to just be quick and react to the dynamics that are happening. You don’t have to out-drive your headlights.

You can keep things within your management ability and still retain a global view.

MJ: What exciting innovations in consumer electronics can we expect to see soon?

VS: Interaction is key. It’s what people are waiting for – such as instantaneous news, and television on handheld devices. G3 is coming along, but we’re still not seeing enough content. People want sports and news instantly, but there has to be a way of them to be able to watch it properly. I think the solution is a single, monocular display where you can use one eye to interact with the technology without being totally submerged, and it will be real time. These developments will start to make people feel fully connected, wherever they want to be.