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AST appoints new president

Ian Diery, the chief executive and president who joined AST less than a year ago, has resigned but has been replaced with a manager from Samsung Electronics.

AST Research (ASTA) announced the resignation of Ian Diery, the chief executive and president who joined the embattled personal computer maker less than a year ago, who has now been replaced with a manager from its major investor, Seoul-based Samsung Electronics.

Young-Soo Kim, an AST director and former Samsung vice president who played a principal role in Samsung's investment in AST, has been named as Diery's replacement. The company said in a statement that Diery's departure was "amicably agreed upon" and the former CEO will pursue other interests. But the company's public stance belies the fact that it has spent a year trumpeting Diery as its turnaround savior.

AST hired Diery, who had been in charge of Apple Computer's hardware division, last November. His goal: to turn around the company that had been losing market share and posting multimillion dollar losses.

Samsung started taking charge when it invested $60 million in AST earlier this year. The deal was negotiated so that AST could repay a portion of a promissory note to Tandy for the purchase of its PC manufacturing operations. The arrangement gave Samsung control of 49.9 percent of the PC manufacturer.

Communication between Samsung officials and AST management has been difficult and has led to a conflict in expectations, Kim said in an interview with CNET today. He added that cultural differences contributed to those misunderstandings.

Despite these problems, Kim said there are no additional management changes expected or planned. He also noted that Samsung has no plans of increasing its stake in AST and transforming the company into a subsidiary of Samsung.

Industry observers say with Samsung in control, Diery just didn't fit in anymore.

"He did some innovative things. Maybe he didn't do them in the time that Samsung wanted him to," said Bill Schaub, research director at market research firm Dataquest. "He also has a strong personality and maybe his style was not compatible with the new Korean investors. His leaving could be as much a personality thing as a performance thing."

Diery was not available for comment.

In naming Kim as CEO, AST hopes to make itself a global force. "We continue to believe in the future of AST as a truly global force in multimedia technology, and we believe strongly that Y.S. Kim can make that vision a reality," said Kwang-Ho Kim, AST chairman and chief executive of Samsung.

Kim said he plans to capitalize on Samsung's resources, from its financial deep pockets to array of products. Samsung can supply AST with virtually every component it needs for its computers, including monitors, but Kim believes that this relationship has not been fully tapped. He added that Samsung is not looking to supply AST will all its components, just a larger share.

Kim says his goal is to improve AST's performance in delivering the right product mix at the right time. But what will that mix include? He declined to elaborate, other than to say the company is "focused," given analysts' concerns that a firm strategy will be needed.

But Schaub says simply playing executive musical chairs won't be enough to bring AST back to the forefront of computer manufacturers.

"His resignation won't help AST," Schaub said. "They continue to play the middle of the road. They can't be a premier player and a value player. They have to chose and focus their strategy."

Diery's achievements at AST included a marketing strategy that moved the company onto the shelves of giant retailer Wal-Mart Stores, arranging a deal to sell older, less expensive 486-based computers and monitors for under $1,000 in Wal-Mart.

"That arrangement appears successful," Schaub added.

AST shipped 180,000 units in the United States during the second quarter that ended June 30, up seven percent from the same time a year ago.

The company posted a $98.7 million loss during the second quarter, compared to a $31.6 million net loss for the quarter a year ago. Sales, meanwhile, reached $539 million for the second quarter, down from $622 million for the second quarter a year ago. AST, however, improved its performance over the first quarter of this year by narrowing its net loss by nearly 15 percent and increasing sales slightly by less than 4 percent.