AST Leader Sees Himself as an Agent of Change : Computers: Safi Qureshey runs company whose purchase of Tandy placed it among the nation’s top five PC makers.
Safi Qureshey was attending a conference of business executives, listening to complaints about changes at other companies, when he felt compelled to speak.
He raised his hand, introduced himself and said: “I look at it like the biggest person that has to change is myself. If I do not change, I cannot lead because the company has to change.”
His company, AST Research Inc., is going through its biggest change ever. Until last summer, AST was a solid but quiet grower in the frenetic personal computer business.
Then it entered a $175-million deal to buy the manufacturing operations of Tandy Corp., a move that nearly doubled AST’s size and placed it among the nation’s top five PC companies.
Even without the Tandy acquisition, AST’s unit sales jumped 66% last year, analysts estimate. For the six months ending Jan. 1, the first half of AST’s fiscal 1994, the company earned $26.2 million on sales of $1.19 billion.
The stock plunged last week on word from the company that third-quarter results would fall below Wall Street expectations, suggesting a possible weakening of PC demand. But industry analysts said the market was overreacting and that the PC outlook remains strong.
(Also last week, a group of shareholders filed a class-action lawsuit claiming that AST misled them about the acquisition of Tandy’s manufacturing operations. The suit, filed in a federal court, contends that AST executives misled stockholders by saying the acquisition was consistent with the company’s objectives when, in fact, it was a “high-risk gamble.” An AST spokesman has declined to comment on the suit.)
In the eight months since the Tandy deal closed, AST has realigned its manufacturing worldwide. The biggest changes, designed to take advantage of bigger Tandy facilities, moved jobs from California to Texas and from Scotland to Ireland. In the process, AST eliminated 1,000 existing jobs and created 850 new ones.
Qureshey felt it was important to move quickly since so many employees would be affected. “We get paid for making decisions,” he said.
“That whole integration strategy is something that, in a company of our size, should have taken much, much longer if you consider the magnitude of the change,” said Jim Forquer, who moved from Apple Computer Inc. to become AST’s senior vice president of operations last year.
“To concede the realities of inertia and resistance to change, Safi would prefer not to concede that,” Forquer said.
Qureshey and two friends, Albert Wong and Tom Yuen, started the company 14 years ago to sell enhancements to the original IBM personal computer. The “AST” came from the initials of the founders’ first names.
Qureshey emigrated from Pakistan in the 1970s to study engineering at the University of Texas. Now 42, he is one of the few surviving founders in high tech’s elite, a circle that includes Microsoft Corp.’s Bill Gates, Dell Computer’s Michael Dell and Gateway 2000 Inc.’s Ted Waitt.
He has taken chances in some areas that received little attention and stayed away from others that brought the spotlight to competitors.
For instance, AST was the first major PC company to venture into China and remains the biggest seller there.
AST was the first PC company to separate its machines into brand lines for businesses and consumers, and it returned to making laptop computers in the late 1980s, ahead of Compaq and IBM.
When rivals Dell and Gateway boasted of lower prices through the use of mail order and toll-free telephone sales, AST pushed wholesalers into getting rid of artificially high discounts.
But AST has stayed away from the strategy of direct sales to consumers. It also has wisely shunned pen-based and hand-held PCs like Apple’s Newton, which have been slow sellers.
“We have picked and chosen our areas,” Qureshey said.
The conservative technological approach means AST isn’t criticized when something fails. On the other hand, it’s not necessarily recognized for new ideas.
“There’s no strong positive identity that comes to mind with AST,” said Richard Zwetchkenbaum, PC analyst for International Data Corp. in Framingham, Mass. “They’re working to correct that, but it’s no easy battle when you’ve got companies like IBM, Apple and Compaq coming out with new technology all the time and you’re just coming out with good things.”
But AST promises a splash in a few weeks with new PCs for consumers that incorporate more telecommunication features. The company won’t reveal more until then, however.
The surge of PC buying among consumers fascinates Qureshey. He was the only chief executive of a major PC maker to attend the Winter Consumer Electronics Show in January.
He said there are two kinds of PC consumers: adults who work on a PC at the office and want to use it at home, who tend to be very selective, and parents, who will buy almost anything their computer-savvy children want.
“There is a tremendous education going on below the surface that we don’t realize,” Qureshey said of children. “They get these game magazines. They know about bulletin boards and where you get shareware. They’re traveling to each other’s house with diskettes and CD-ROMs.”
The growth of multimedia PCs with compact disc drives, known as CD-ROM, is one of the few times where demand drove technology rather than vice versa.
“If you look at CD-ROM, that did not come from us,” he said. “It came from the consumer side.”
He admits surprise at that change.
“If our industry, if our company was growing 2%, 3%, 5% a year, maybe I would get bored and do something else. We are part of an industry, though, and part of a company that is changing so fast, you’ve got a tiger by the tail.”
A Times staff writer also contributed to this report.
