"Determining Key of differentiation is software"Interview with CEO Park, Ho-sung of Ellion DigitalBy the day, we are seeing the rush of digital gadgets like digital camera, camcorder, HDTV, DMB, PMP, PDA and mobile phones. Especially, HDTV’s penetration rate is escalating with lively and vivid definition even showing a person’s pore. Reflecting the trend, more and more people watch HD video clips with PC but because the size of files is so big, most people watch DivX video clips, compressed files. DivX is a kind of data compression standards made based on MPEG-4 Codeq, a video clip standard and boasts high compression rate to store a movie on a single CD title. Products with excellent definition and easily connected to HDTV or monitors like DivX player are also released. So far, Elion Digital focused on DVD player business also showcased DivX player. Next is the interview with President Park, Ho-sung of Elion Digital We will attract customers with great design and softwareElion digital set up in 2002 has concentrated on export and OEM market so the company is not widely known in Korea. “So far, we focused on PVR, Combo recorder embedding DVD players and hard disks. There are many reasons why our company is not widely known in Korea, but the biggest reason is that it was not easy for us to compete with large companies in home appliance market including DVD player market.”In fact, Korean consumers prefer products of large companies rather than SMEs. Because, brand is an important factor in purchasing for them and consumers have prejudice that large companies would provide better after services. “Unlike MP3 players, PMPs and navigations, brand has huge power in home appliance market. Moreover, due to high penetration rate of VTR, it was very difficult for us who only manufacture DVD players to make entry into domestic market.”Then, why Elion Digital showcased DivX players in Korean market? “Decreased export competitiveness due to exchange rate appreciation is a partial cause. But we thought that since DivX players have networks function, we can fully secure significant market share in Korea, an internet powerhouse. The products will be released from August and there’s testing products.”DivX players can be divided into products using optical media and products with hard disks. The product developed by Elion Digital is DivX player using hard disk. “Users can easily store video clips taken with Digital camcorders or cameras on the arrival of home digital era as well as running DivX. Moreover, stored video clips can be encoded with MPEG-2(DVD) and it is easy to edit with wireless remote control even without a PC.”In fact, DivX players focused on capacity to run video clips, in other words, decoding. Of course, it was possible to store digital date but follow up processing and encodings were done on PC. “Users who edited video clips through PC would know that it is not that easy job. They had to have high-end PCs and learn editing programs. But, DivX player we will release enables user to easily edit video clips by installing separate encoding chip set and we put a lot of efforts for better menu design considering users’ convenience. Moreover, we embedded HDMI terminal as a basic option and HDTV tuner or wireless LAN can also be installed as options through USB port.” In other words, the company will target the market with a convergence product combing recording and editing. But as said earlier, Elion digital has relatively weak brand power in domestic market since it has concentrated on export and OEM. “We fully acknowledge that. But, we’re convinced that we can target domestic DivX player market based on the know-how we gained from competition with large companies abroad.”As shown by DVD players and MP3 players market, there is a high possibility that low-cost DivX players originating from China and Taiwan will rush into Korea market. So, the reporter asked Presidient Park that how the company will react to that. “Unlike analogue, digital products have lower technology barrier because major chip set manufacturers provide most of the technologies needed in developing products. Therefore, China which has cheap labors take advantage in hardware price competitiveness.” As President Park said, chip set manufacturers provide the technologies needed in developing products which is called reference design. Simply put, without special know-how, most electronic device manufacturers can make relevant products. To some extent, it may sound very convenient. But, since they do not have source technology, they have no option to be reduced as a technology dependent country and cannot be free from the power of chip set manufacturers. Because, like developing new medicines, it is impossible to develop a chip set without long time, efforts and technological power. “We put more efforts in developing software rather than hardware. For example, we solve the problem of user interfaces or various types of bugs through firm ware. By utilizing software technological power, we can realize functions that cannot be realized with hardware. Moreover, we can make differentiation points from low-cost products. Low-cost products have less software support. Thus, they cannot support new codec and solve the problems hidden in them. It means that Elion digital will take advantage from the fact that successful products had strong software support.