CASE 6: HTC Corp. in 2009 (HBP)

As a user of HTC Hero, I like the cellphone quite much especially by gradually discover its powerful functions.

Here is just brief of HTC's Business form:

OEM (original equipment manufacturer 代工):manufactures products or components that are purchased by a company and retailed under the purchasing company's brand name.
From Wikipedia http://en.wikipedia.org/wiki/OEM
HTC did OEM for HP, Dell, Fujisu, Palm, SonyEricson.

ODM (Original design manufacturer 贴牌):is a company which designs and manufactures a product which is specified and eventually branded by another firm for sale. Such companies allow the brand firm to produce (either as a supplement or solely) without having to engage in the organization or running of a factory.
From Wikipedia http://en.wikipedia.org/wiki/Original_design_manufacturer
HTC did ODM for AT&T, Orange, T-mobile, Vodafone

The basic difference between OEM and ODM is whether involved design.

Mobile Operator Business: Did find the defination of Mobile Operator from any of the search tool, but according to the artical, the main difference from ODM is that Operator involve responsibility of sales, marketing and inventory management and connect more to the end-customer.

Please correct me if i'm wrong

What is the strategy to distinguish its own brand product HTC with those of OEM and ODM?

The Strength of HTC:
 Products of HTC have a strong innovative capacity.
 HTC was in rapport with operators.
 HTC has two powerful partners—Microsoft and Google.
 HTC had a diverse customer base (no one client held more than 10% of HTC’s business) and focus on a high-growth market.
 HTC is a Listed company and easier to get financing from stock markets.

The Weak Points of HTC:
 Brand recognition of HTC is relatively low.
 The product cost of HTC is relatively high.

The Opportunity of HTC:
 With the development of the 3G, in 2010 smart mobile phones are expected to take more than 30 million in china.

The Threat for HTC:
 In the American market, HTC is facing the apple company's patent infringement actions.
 Mobile Manufacturing industry is highly competitive.

My Suggestions to HTC

First, HTC should provide high-quality and cost-effective products to occupy more market shares.

Second, If HTC wants to make a big breakthrough on the Chinese domestic market，it must collaborate closely with the Chinese operators.
In addition, HTC can merge other world famous brands, such as the Palm, to make the best use of its intellectual property rights to deal with Apple.

Last but not the least, in order to control efficiently the production cost, the manufacturing of HTC shall be moved to northwest of China, where the labor cost is relatively lower.

WangChun/2010961599/GA10

Dears,

Just want to share a picture i found from internet clearly stating the history of HTC.
It's pretty interesting that the material claimed that since from 2005 when HTC establish close cooperationship with Microsoft and start focusing on develop smartphones, its performance started to raise significantly.

url=https://servimg.com/view/15655558/5][/url][/img]

Picture from http://china.nikkeibp.com.cn[b][i][img][img][img][/img][img][

leon0816 wrote:The Strength of HTC:
 Products of HTC have a strong innovative capacity.
 HTC was in rapport with operators.
 HTC has two powerful partners—Microsoft and Google.
 HTC had a diverse customer base (no one client held more than 10% of HTC’s business) and focus on a high-growth market.
 HTC is a Listed company and easier to get financing from stock markets.

The Weak Points of HTC:
 Brand recognition of HTC is relatively low.
 The product cost of HTC is relatively high.

The Opportunity of HTC:
 With the development of the 3G, in 2010 smart mobile phones are expected to take more than 30 million in china.

The Threat for HTC:
 In the American market, HTC is facing the apple company's patent infringement actions.
 Mobile Manufacturing industry is highly competitive.

My Suggestions to HTC

First, HTC should provide high-quality and cost-effective products to occupy more market shares.

Second, If HTC wants to make a big breakthrough on the Chinese domestic market，it must collaborate closely with the Chinese operators.
In addition, HTC can merge other world famous brands, such as the Palm, to make the best use of its intellectual property rights to deal with Apple.

Last but not the least, in order to control efficiently the production cost, the manufacturing of HTC shall be moved to northwest of China, where the labor cost is relatively lower.

WangChun/2010961599/GA10

Agree

What will the future mobile phone looks like? What’s the next generation technology?
Imagine a big flexible screen which can fold into pocket, or completely vocal control without any touch, or chips planted in a watch or glasses or earrings to function as phone, etc. I think technology innovation is most important to electronic devices. It’s a trend for mobile phones to become more functional, more easily to operate, to carry with, and to vary with individual tastes; to be attached with fashion industry more closely; to provide communication with each other more vividly and access to internet and outer world more conveniently. To survive and sustain, HTC must follow the trend and try to lead the trend.

Actually one of the key point for HTC to be so successful is that they have put a lot of attention on CHinese market. Dopod International was founded in 2004 and it is now directly owned by HTC with over 50% of shares (acquired on June 2, 2006). It has manufacturing bases in Shenzhen and Wuhan.Dopod specifically produces PDA phones.
HTC and China’s largest cellular operator China Mobile has work together. HTC also work with Google in creating the gPad a device engineered in competition with Apple Inc.'s iPad. The device will be based on Google's Chrome operating system it will also have multi-touch technology.
Although China's market is not likely to become a major contributor to HTC's revenues now, they believe China is an important smartphone market.

somehow i found that HTC is playing a "hard to reach" game. you cannot purchse the genuine products in Mainland China, but to get the parallel import from HK. In fact, the term “parallel import” is a loosely used expression intended to explain HTC mobil sold outside “normal”, authorised distribution channels.

There's an old saying: good things do not come easy. HTC is kind of like this, isn't it? if so, the phenomenon is contradictory since China owns a huge business opportunity than other countries. why chinese cannot purchase the product in Mainland China? Not sure if it's the government policy or some other marketing strategy with HTC

paste some introduction about HTC in www.htc.com

Introduction

HTC Corp, (TAIEX: 2498) produces powerful handsets that continually push the boundaries of innovation to provide true mobile freedom.

Founded in 1997 by Cher Wang, Chairwoman, HT Cho, Director of the Board & Chairman of HTC Foundation, and Peter Chou, President and CEO, HTC made its name as the company behind many of the most popular operator-branded devices on the market. It has established unique partnerships with key mobile brands, including the leading five operators in Europe, the top four in the US, and many fast-growing Asian operators. It has also brought products to market with industry leading OEM partners and, since June 2006, under its own HTC brand.

HTC is one of the fastest-growing companies in the mobile sector and has achieved remarkable recognition over the past couple of years. Business Week ranked HTC as the second best performing technology company in Asia in 2007 as well as giving the company the number 3 spot in its Global listing in 2006.

Since launching its own brand 18 months ago the company has introduced dozens of HTC-branded products around the world.

Products & Innovation

HTC is known for its innovation. It is constantly broadening the range of devices it offers – introducing devices to support specific applications and new form factors that meet the increasingly diverse needs of its customers and partners.

HTC's product portfolio offers easy-to-use solutions that embrace the full range of mobile multimedia resources, wireless anytime and Internet on the go.

It has a rich heritage of device 'firsts':


First color palm-size PC (1999)
First Microsoft Pocket PC (2000)
First Microsoft wireless Pocket PC (2002)
First Microsoft powered Smartphone (2002)
First Microsoft Smart Music Phone (2004)
Large 2.8" TFT touch-screen LCD display
First Microsoft 3G Phone (2005)
First Microsoft Windows Mobile 5.0 Platform Phone (2005)
First tri-band UMTS 3G device on the Microsoft Windows Mobile platform (2006)
First Microsoft Windows 5.0 Smartphone (2006)
First Tri-band UMTS PDA
First intuitive touch screen to allow finger tip navigation (June 2007)

In early 2006, HTC launched a powerful new device with a groundbreaking form factor: the HTC Advantage. The HTC Advantage is the world’s most powerful office, boasting a 5" screen and full detachable QWERTY keyboard. This was followed in early 2007 with the introduction of the HTC Shift. Equipped with Windows Vista this device includes a brilliant 7-inch widescreen touch display and a 40 gigabyte hard drive.

HTC launched the HTC Touch™ in June 2007 as the result of extensive R&D and the conviction that fingertip control would enable more intuitive navigation. The groundbreaking HTC Touch™ is equipped with TouchFLO™ so that consumers just sweep their finger across the screen to get access to the most commonly used content, contacts and features in a simple finger flick.

HTC aims to continually develop smart new devices that empower users on the go, providing more freedom in the way they live their lives.

Pioneering Through Partnerships

Since its inception, HTC has pioneered the smart phone market through partnerships with Microsoft and key mobile operators. Additional strategic partnerships include: Intel, Texas Instruments and Qualcomm; some of the largest mobile operators including Orange, 02, T-Mobile, Vodafone, Cingular, Verizon, Sprint and NTT DoCoMo.


Mission & Capabilities

HTC's mission is to become the leading innovative supplier of mobile information and communication devices by providing value-added design, world-class manufacturing and logistic and service capabilities.

HTC is committed to driving the growth and capabilities of smartphone technology. Since its establishment, the company has developed strong R&D capabilities, pioneered many new designs and product innovations and launched state of the art PDA phones and smartphones for operators and distributors in the global telecoms industry. It has invested in a strong R&D team accounting for 25% of the total headcount and a world-class high-volume manufacturing facility, both based in Taiwan.

I think that HTC has two powerful partners--Microsoft and Google is not the strength.
It's difficult to balance the relationship between Microsoft and Google.

leon0816 wrote:The Strength of HTC:
 Products of HTC have a strong innovative capacity.
 HTC was in rapport with operators.
 HTC has two powerful partners—Microsoft and Google.
 HTC had a diverse customer base (no one client held more than 10% of HTC’s business) and focus on a high-growth market.
 HTC is a Listed company and easier to get financing from stock markets.

The Weak Points of HTC:
 Brand recognition of HTC is relatively low.
 The product cost of HTC is relatively high.

The Opportunity of HTC:
 With the development of the 3G, in 2010 smart mobile phones are expected to take more than 30 million in china.

The Threat for HTC:
 In the American market, HTC is facing the apple company's patent infringement actions.
 Mobile Manufacturing industry is highly competitive.

My Suggestions to HTC

First, HTC should provide high-quality and cost-effective products to occupy more market shares.

Second, If HTC wants to make a big breakthrough on the Chinese domestic market，it must collaborate closely with the Chinese operators.
In addition, HTC can merge other world famous brands, such as the Palm, to make the best use of its intellectual property rights to deal with Apple.

Last but not the least, in order to control efficiently the production cost, the manufacturing of HTC shall be moved to northwest of China, where the labor cost is relatively lower.

WangChun/2010961599/GA10

First, I think HTC does not necessarily to compete with iPhone to be the NUMBER 1. The market is changing everyday. Apple does not know where his position is, either.

Second, The similar appearance does harm to HTC because APPLE users would not buy it again. I believe UI design is more important than tech for lots of segments.

Third, the workforce in Taiwan should be more innovative to develop more amazing devices.

A very useful thoery learned from class today - the different category of innovation.
Think the future HTC should focus on Line Extension Innovation and Experiential Innovation, ig, create Android based HTC Pad or even PC to extend the brand royalty.

http://v.youku.com/v_show/id_XMTg2ODE1NDM2.html

Share with everyone a movie that shows how CRAZY a Apple fan can be.
They do not care anything but extremly royal to the brand.

"It is an Iphone" and that's all the reason why i want it.

EmilyHuang 10GB wrote:http://v.youku.com/v_show/id_XMTg2ODE1NDM2.html

Share with everyone a movie that shows how CRAZY a Apple fan can be.
They do not care anything but extremly royal to the brand.

"It is an Iphone" and that's all the reason why i want it.

This world is full of idiots, our job is to make money from them.... they are nothing but ATM.....


I think one of the main issue of HTC is the lack of intellectual properties. not enough technology patent for itself.

Finally done all the assignment

 Brand image is not clear, especially in US market.
 High ASP(Average Sale Price) makes it more difficult for customer to choose HTC
 Lacked significant intellectual property rights in mobile phones
 The OS strategy change from Microsoft to Android may cause uncertainty.

Jerry_Jiang_GB_2010960820 wrote: Brand image is not clear, especially in US market.
 High ASP(Average Sale Price) makes it more difficult for customer to choose HTC
 Lacked significant intellectual property rights in mobile phones
 The OS strategy change from Microsoft to Android may cause uncertainty.

Just finished my last assignment~~~~~Feel so good

Own brand sales reflected a conscious by HTC to invest more into R&D to drive product innovation. Compare to Samsung and RIM, HTC need to invest more in this key area.
Keep shorter product life cycle and reduce the time to the market.
Follow Apple and other competitors to offer more application through online store.

2010GB Mei Ming

Just as the CMO John Wang wonders, “Apple equals simplicity, FedEx equals speed, RIM equals mobile e-mail, what does HTC stand for?” To establish the brand, the first thing to do is to identify the distinct value of the company: what makes it different from its competitors?
My answer is quite simple, China.
Why “China” could be an identity? First of all, it is because China is the biggest market, to succeed in China only is already sufficient to enable the success of the company. Second, China had only recently opened up its doors to 3G networks. Due to different 3G platforms, the variety and the quality of the Smartphone available in the market are not sufficient, especially for the two 3G platforms developed by Chinese. The gap indicates huge opportunity for HTC to produce for China. The different 3G platforms in China also create a relatively equal place for HTC to compete with the other big players, as all of them are at the same starting point.
Third, as a relatively small company to catch up in an already highly competitive market, “focus” strategy would be the only feasible strategy to start up and to maximize the effect of the investment.

when HTC moving upward, brand image and projects are all very important. I find one question hasn't been mentioned is define your competitor and how good I should be to reach that level.
Building brand image without comparation is useless. And in this case for mobile phone industry, brand strategy can be diverse based on market. Moving upwards, HTC need to take it step by step.

From GA YuYong 2010960703

• Find a very big but still undeveloped market to build and establish the brand awareness.Enhance cooperate with partners.
• Invest some money into it and eliminate the barriers in technology and intellectual property.
• From product strategy side, HTC should expand its product line from current high-end offerings towards mid-range.
• Consider creating more products that haven’t been invented out but is very useful and attractive for people.
• HTC should expand its products from hardware to software and service.
• HTC used the highly customized approach to make its products and this greatly increased its cost.

EmilyHuang 10GB wrote:http://v.youku.com/v_show/id_XMTg2ODE1NDM2.html

Share with everyone a movie that shows how CRAZY a Apple fan can be.
They do not care anything but extremly royal to the brand.

"It is an Iphone" and that's all the reason why i want it.

VERY INTRESTING!
IT IS GOOD IRONIC MOVIE FOR THE IPHONE COMPANY, BUT AT THE SAME TIME, IT SHOWS THE POWER OF THE BRAND VALUE.

Define the target customer segment, position the target marketing range and apply some diverse marketing strategy to promote the brand image.
To choose a right time and a right place to promote its brand is significant for HTC. The users are those “prosumers”, who have relatively small market share. China and the United States are the most promising market in the smartphone area. China has an up-grade class with the number increasing, and U. S. is no doubt the most consumable market. Actually HTC has accumulated a certain fixed users group through Dopod in China, which will be a great advantage for marketing. U. S. may be a harder place to explore, because Apple and RIM occupy the most of the market. But from the grow forecast for mobile phone shipments, it shows that the growth of smartphone in the global market will be 22.2%, while standard phones will be only7.4%; and in the US market the smartphone may arrive at 28.4%, while the standard phone will be -1.2%. So US market shows a great demand for smartphone, which is a terrific opportunity for HTC. And the greater power of Apple and RIM also threat the benefit of the operators. HTC may adopt more mild collaboration strategy with the operators, to expand its market. HTC’s target customers are high-end users, who are probably the higher-level managers, businessman, lawyers, professors, and other people with substantial income. HTC can cooperate with banks, golf clubs and other associations, to bring out some privilege or VIP card, to enhance its brand image among this group. Furthermore, HTC is a fashion smartphone, the partnership with some luxury brands like LV, Gucci, and BMW would be a good choice to enlarge its popularity among certain fashionable people.

Apple launched its Iphone 4 in China yesterday, which showed us again Apple fan's enthusiasm to its products. Iphone fans queued 10 hours to buy the phone. That kind of customers loyalty is what HTC needs to build besides to build up the brand value and achieve economies of scale. That will include a lot of aspects in the business such as technology leadship, integrated platform, hign value proposition and a clear market positioning.

EmilyHuang 10GB wrote:A very useful thoery learned from class today - the different category of innovation.
Think the future HTC should focus on Line Extension Innovation and Experiential Innovation, ig, create Android based HTC Pad or even PC to extend the brand royalty.

Agree,maybe we will find a H-pad in the near future?

And I strongly suggest HTC cooperate with China Mobile to launch its marketing strategy in China.

I think the problem which HTC is facing are:
Creating a brand bores significant risks.
In the brand mobile market, competitors are really strong.
HTC’s cost is high and it lacks of intellectual property rights

My suggestion for HTC is to cooperate with partner and decrease the cost:
Set up a joint venture company with Google
In China market, cooperate with China Mobile
Decreases cost by shift more production to China mainland