Abstract

As router products have reached maturity, the product design and development strategies of the leading international retail brands have begun to focus on differentiating their products from those of their competitors. In North America, while all of the first-tier vendors have launched travel routers, VoIP routers. and MIMO (Multiple Input, Multiple Output) products, they have also sought to develop devices that would set them apart from the other retail brands.

Linksys has been collaborating with Broadcom to develop wireless security devices that are easy to install. The use of special software makes the installation process reasonably painless, while at the same time meeting consumer security needs. D-Link, recognizing the potential that the vast gaming console market offers, has become the first of the leading retail brands to roll out a Gigabit gaming router that will help to overcome delay due to insufficient bandwidth when playing online games. Netgear has been focusing more on security products, launching several new types of VPN router and printer server security router.

In the Japanese market, the main emphasis in the new models that the leading retail brands have been rolling out is on convenience. This is particularly evident in IO Data's 802.11a/b/g router, which is designed to allow the user to implement wireless Internet access with just four buttons, while also providing security settings and USB storage functions. Buffalo's Secure Wireless Remote Router allows consumers to implement SOHO or SMB (Small and Medium Business) network security through remote control.

It can be seen from the above that the two areas on which the leading retail brands will be focusing most heavily in 2005 will be the consumer electronics market and network security. With home networking and wireless multimedia devices starting to take off, and with the 802.11n standard yet to be finalized, the competition in the retail market will be intense.

Appendix

Definitions

Business Types

OEM

The OEM business model entails carrying out product manufacturing or assembly according to specifications supplied by the customer. The OEM business model emphasizes production efficiency; thus, in order to lower costs, customers outsource manufacturing to OEM providers. This cooperation forms a division of labor among design, manufacturing, and sales.

OEM production for WAN includes shipments in both PCB (Printed Circuit Board) form and bundled with desktop and notebook PCs. Manufacturing undertaken for leading international vendors is also included.

ODM

The ODM business model entails undertaking product design and manufacturing, but not direct retail sales or brand promotion. ODM providers either collaborate with customers on product specifications or independently design products according to customer specifications; the ODM provider then receives manufacturing orders upon customer approval. The ODM model links the sales capabilities of the ODM customer and the design and manufacturing capabilities of the ODM provider, developing a cooperative division of labor throughout the product's value chain.

Retail Channel

Business from retail channels includes orders from brand-name retail brands, such as Linksys or Netgear, with whom Taiwanese makers cooperate on design. Business from retail channels also includes private label shipments to end-market retailers.

Shipment Destinations

''Asia Pacific'' does not include Japan or China, but includes Australia and New Zealand. Russia is included in ''Europe.''

Glossary of Terms