Perception Digital Ascends to International Arena
Through Innovative R&D Achievements

Perception Digital Holdings Limited was founded in 1999 by three professors from the Hong Kong University of Science and Technology. It got listed on Hong Kong’s Growth Enterprise Market in 2009 but switched successfully to the Main Board this year. Unlike most other industrial manufacturers, Perception Digital is engaged mainly in technological R&D and design. It modifies and upgrades technologies from overseas through patent licensing and uses them to manufacture various types of advanced electronic technological products.

Just as mentioned by its chairman Dr. Jack Lau, the company lays great store by intellectual property (IP) trading. “We have registered more than 70 technology patents so far. In the past three years, our income from license fees and royalties amounted cumulatively to over HK$70 million, averaging about HK$23 million a year,” he said. He is convinced that, through IP trading, products can be disseminated to a more general consumer level, while the sound legal protection and professional R&D personnel available in Hong Kong can draw more foreign companies to use the Hong Kong platform for trading.

“In the 12 years since its founding, Perception Digital’s business was focused mainly in the design and marketing of cutting-edge electronic products. Its future direction of development is in utilising its exclusively owned IP patents to allow the general public to get in touch with cloud technologies and enter the world of online entertainment and information through advanced electronic products,” said Dr. Lau. He stressed that technologies must first be simplified for the ease of use by consumers before technical products can be popularised.

Take a Bluetooth headset launched recently by Perception Digital as an example. In addition to applying for many technology patents, the company has collaborated with another company in developing a jogging headset which can measure heartbeat by means of infrared rays. Dr. Lau said, “The core technology of this product is 100% locally developed. Because technological breakthrough has been made, for the first time the name of the Hong Kong partner is printed on the packaging box of the product. What’s more, the fact that we are collecting royalty from our partner is a rarity in Hong Kong.”

Another example is a newly debuted PDXTRA TV which is featured with an original seamless streaming technology. Not only can a user enjoy HD effect, he can also access a number of online multi-media broadcasting platforms such as Youtube, Sohu, Todou and transaction platforms such as Alipay and VANCL. It takes about 20 seconds for starting up and connecting to the internet for browsing real-time information and making contacts with the rest of the world. “Though the product involves complicated technologies, the key to success is that it can be controlled even by seniors.” said Dr. Lau.

On the operation front, Perception Digital has expanded gradually from providing customers with product design proposals in the beginning to developing patented technologies. In addition to developing its own products, it also engages in using external technologies to produce augmented products such as the Vulkano media entertainment platform. The company also provides services at different levels according to the needs of a supply chain. Currently Perception Digital’s annual turnover is around HK$500 million and digital signal processes (DSP) is one of its core businesses.

Dr. Lau contends that Hong Kong enjoys IP trading edges thanks to its personnel, market and law. “Hong Kong engineers have two advantages. First, their academic qualifications are higher and they have wider international perspectives. Second, their frequent contacts with mainland manufacturers help in their quick commercialisation of R&D concepts. When it comes to the market, the current trend in technological product development is the blending of hardware and software. Hong Kong has always an upper hand in this area and so they can respond to market needs quickly and accurately. For example, Hong Kong engineers are in a leading position in the area of DSP.”

The rule of law is a prerequisite for IP trading. Commenting foreign companies’ confidence in the Hong Kong legal system in protecting IP, Dr. Lau said, “When signing patent contracts in the past, foreign companies often asked for adopting the laws of certain countries. Now even for some confidential patent projects, they have no qualm letting Hong Kong lawyers handle them and no longer question or mistrust Hong Kong’s legal institutions. It is in this direction that Perception Digital carried out R&D on the heartbeat monitoring headset. Reality also drives home that in future, industries cannot rely solely on production but have to tie in with innovative patents before the manufacturing sector can be thrust to a leading position.”

He opined that SMEs can make good use of Hong Kong’s role as a bridge for the mainland in carrying out external trade and attract foreign companies in exploiting the advantages of Hong Kong’s service industry. “This market demand is already taking shape and patent businesses in electronics, food and beauty are all well suited for development in Hong Kong. For example, giant enterprises such as IBM, Oracle and SAP are all using Hong Kong as a platform to improve IP and technology to suit the needs of mainland users so as to venture into the mainland market later. If Hong Kong wants to make use of IP further in fostering the flourishing of different industries, it should use the stock market for financing and public listing. This way results will be all the more significant and Hong Kong’s status as a business and trading hub will be all the more secured.”

Dr. Lau said that to seize business opportunities one must be daring in innovations. “Many manufacturers are still sticking to old lines of thinking such as the belief that they must have their own plants and own land. Traders still insist on simply buying goods for distribution. In Perception Digital we don’t have any physical production plant. Our resources are mainly earmarked for building our own design team, our market positioning is in “quality not quantity” and our objective is to seize a leading position in the market through the development of special patents.” He disclosed that Perception Digital’s future key investment focus is multi-directional including product technology design, internet TV and healthcare devices incorporated with biometric monitoring functions.

In summing up the successful experience of Perception Digital, Dr. Lau stressed the importance of being patient in investing in scientific research. “Respecting technology is of vital importance,” he said, “And whether or not investors are zealous with technology is also very important. All buyers want delivery in 24 hours. But you must recognise that every technology needs a minimum of two years for development and the results of introducing an immature technology to the market would not be desirable.” It is his wish that Perception Digital will let overseas companies realise Hong Kong as more than a global financial centre: it can also win world admiration on the merits of its innovative technologies.

“The TV drama series Six Million Dollar Man in the 1970s had profound influence on my personal development. The biggest inspiration it gave me was that there is no end to technological development and that future technologies that seem beyond reach will eventually be realised one day,” he concluded.