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Michael Mou (Int'l Edition)


International -- The Stars of Asia -- Entrepreneurs and Dealmakers

Michael Mou (int'l edition)

Founder -- DBTel -- Taiwan

Michael Mou, 49, was hardly an instant success. The electrical engineer spent two decades building up the telecom-equipment manufacturer he founded fresh out of business school in Taiwan in 1979. While other Taiwan companies established stardom in the booming PC business, Mou struggled to make DBTel Inc. a leader in less glamorous products: keypads and cordless handsets. "Cordless wasn't a really big market," says Mou. "So the company had a very low profile."

Mou isn't toiling in obscurity now. The advent of the wireless Internet and booming demand for cell phones has made telecom equipment hot--and vindicated Mou's early bet on the sector. Nearly 10 years ago, he started making cellular phones using the GSM standard common in Europe and Asia. An original-equipment manufacturer for Motorola Inc., DBTel is one of the hottest Taiwan companies around. "I have always said that the personal communicator could create the future of Taiwan," he says. His company's stock is up 330% in the past 12 months.

But he's also cautious, remembering that he came close to bankruptcy twice in the early '80s, when inventories got out of hand. "They were very bad experiences," he says simply. As a result, Mou avoids debt as much as possible. Still, he is pushing aggressively to expand DBTel's production capacity--from 3 million handsets last year to 18 million this year. Says Mou: "We are the pioneers."Return to top

ONLINE ORIGINAL

A Chat with Michael Mou

Michael Mou is the founder and chairman of DBTel, a leading Taiwanese mobile-phone producer. He recently spoke with Business Week Asia Correspondent Bruce Einhorn about a hot industry. Here are edited excerpts of their conversation:Q. You've had a lot of ups and downs in your career. What was DBTel making when you founded it 21 years ago?

A. The first product we made was a computer dialer. That was in 1979, when microprocessor technology happened. We lost a lot of money with that first machine. We learned we had to start from a very simple product. So we went back to push-button dialer business. In 1981, when Judge Green deregulated AT&T, the American market picked up for one-piece phones. Then we went to multifeature telephones. Then to analog cordless. Then to digital 900 cordless. We had 75% of Taiwan's total cordless telephone. But cordless wasn't a really huge market, and the company had a very low profile.Q. So you're no Johnny-come-lately to the phone industry. When did you make the move to cellular phones?

A. We started to design GSM [the so-called third-generation wireless technology] five or six years ago. But the first-generation products didn't go very well, the quality and performance was not there. In 1998, we started with Motorola. We had experience with cordless telephones, which were similar technology to GSM, especially for the manufacturing side. So Motorola chose us as a partner.Q. How did some of your early setbacks affect your management style?

A. In last 21 years, there were two times when the bankers came to seize [our assets]. They were very bad experiences. So I try to manage the company with very limited debt. We are much more conservative.Q. What's coming up next for DBTel?

A. Third-generation phones. We will launch in September this year. It is 79 grams -- very light. And it's 85 cc -- very small. The standby time is very long -- over 350 hours -- and the talking time is over four hours. So it is quite advanced. This year, coming out with 25 new models in cellular handsets. Q. Now mobile phones are suddenly a hot sector. After struggling for so many years, do you feel vindicated?

A. Five or six years ago, I always said to the government that the personal communicator could create the future of Taiwan. Taiwan needs next-generation products. Fifteen or 20 years ago, Taiwan started with the PC and semiconductor industry. The personal communicator is the next generation product to replace the personal computer. Taiwan really needs to put more effort and resources into personal communicators. That is the Taiwanese future.Q. What do you make of all the Taiwanese computer makers now hatching plans to become mobile-phone manufacturers? Do you feel threatened?

A. We are the pioneers of this category. Up till now, we have been one step ahead. So we welcome the competition: It's a very big industry that needs money and resources. Taiwan can then become the center of the personal-communicator industry. Once we become the center, then everyone will come here.Return to top


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