Good memories

When engineers John Tu and David Sun saw there was a shortage of surface-mount memory chips in the high-tech market, they decided to do something about it. So, in 1987 with a single product, Kingston Technology was born in Fountain Valley, California, where the company still has its global headquarters.

“They put their engineering expertise to work and designed a new single in-line memory module that used readily available, older technology, through-hole components and created a new industry standard,” says Richard Bull, Kingston’s European marketing director. He adds that the company’s focus has not changed much since then: “The products have developed but Kingston Technology has stayed true to its roots and expertise.”

“We are dedicated to the memory business –we haven’t diversified away from that –but at the same time there have been a number of developments in the memory industry, which we have followed,” Bull says. “We started in DRAM, but now we have NAND- based products, the flash-based products, which we’re selling through retail channels to consumers. That’s one diversification that still sticks to our core business.”

Kingston now has more than 4,000 employees worldwide and its range of over 2,000 products is produced at five factories in the US, Taiwan, Malaysia and China. While many businesses have struggled during the recession, Kingston has continued to flourish.

“When the economic environment is not so good, if you’re a lean and mean organisation, as we tend to be, and are set up to deal with the volatility of the memory industry, then you can also deal with difficulty from an economic point of view,” Bull says. “We continuously focus on improving efficiency and investing in new technologies to ensure that we can streamline operational costs without compromising on the quality of our products.”

The company reported revenues of $4 billion for 2008 – the second largest figure in its history – while year-on-year shipments of memory units were up 41 per cent. According to Bull, GfK statistics show that Kingston is now Europe’s leading USB drive manufacturer and second for flash cards, as well as being the global leader for RAM-related goods.

“Memory products are appealing during a recession because they help customers extend and make use of the devices they’ve already got,” he says. “They don’t necessarily need to go out and buy a new PC or camera – through using memory products they make more use of the investment they’ve already made in those products.”

Another ingredient in Kingston’s recipe for success has been to form strong alliances with its retail partners, which has recently meant offering a helping hand through the economic downturn.

“We developed for our retailers a number of things that allow them to add value and take more margin out of the products,” Bull says. “We’ve developed packaging that makes a very clear differentiation between our product lines and offers a ‘good, better, best’ distinction. We’re able to customise products for them – to put customised inserts in products and put content onto some of the memory products. Retailers are very interested in these propositions at the moment.”

As well as making sure it is offering benefits to its retail partners, Kingston has also begun a drive to attract more consumers. “The much newer business for us is the NAND-based products, the flash products, which started in around 2003 or 2004. It’s an area that requires us to develop new routes to market with the retailers and also to market to an area that we traditionally haven’t participated in, so we’re marketing increasingly to the consumer marketplace,” Bull says. “Our photo and video products have now launched into retail outlets such as DSGi. Retail continues to be a growth area for us.”

As part of this new direction, the company launched its first consumer website, www.RememberKingston.com, at the end of August.

“We want to add value for the consumers. The Remember site is designed to be consumer friendly and not too technical, to speak a language that’s perhaps more accessible by the consumer and to help them tackle a number of things that might be of interest to them, whether it’s ‘How do I take better photos with my mobile phone?’, ‘How do I upgrade the memory in my PC’ and so on. They’re things that are challenging consumers and they’re reading the site to find information on them,” Bull says.

With the increasing popularity of Macs and other Apple goods, Kingston has found that there is high demand for compatible products.

“We recently launched our Apple retail SKUs to Apple premium resellers,” Bull says. “Apple computers are found in a lot of creative environments and are often utilised for intensive projects. Therefore the upgrade for memory is one of the most important aspects of performance improvement. Apple memory is a massive growth area for us.”

So what’s next for Kingston? According to Bull, the only way is up. “We will continue to focus on being at the forefront of memory technology and the number one memory manufacturer in the world,” he says.