HTC’s new corporate tagline is “Quietly Brilliant,” but the company is getting large enough that the “quietly” part will not fly for long. The company was co-founded in 1997 as an original equipment manufacturer by Peter Chou, current CEO, and Cher Wang, daughter of the recently deceased petrochemicals billionaire Y.C. Wang. The timing of HTC’s founding was fortuitous, as Microsoft Corp. was then looking for a hardware partner for its new mobile software. By the end of the 1990s, HTC was cranking out the first Windows Mobile personal digital assistants for the OEM market. The next big breakthrough came in 2002, when HTC added cellphone capability to its PDAs. In 2004, HTC sales neared the US$1 billion mark for the first time.
To this point, the Taoyuan-based company, true to its OEM roots, had a decidedly low profile in the world market. That began to change in July 2006, when “Business Week” ranked HTC No. 3 in its list of the world’s best-performing tech companies. The next milestone came in 2007, when the Republic of China government ranked HTC No. 4 on its list of Taiwan’s top global brands.
Until recently, HTC’s operations might have justified the “quietly” part of its current tagline, as it allowed telecom companies in Europe and North America to put their own brands on its phones. However, as shown by the Acer Group, which has become the world’s second-largest PC vendor, if a Taiwan-based company wants to become a major player in the world market, it must create, promote and sell own-branded products. Following this line of thinking, HTC stepped out of the shadows and in mid-2006 began applying its logo to its own devices. From January to late October 2009, HTC sold around 4 million phones under its own brand, becoming the world’s fourth-largest smartphone vendor, trailing only Nokia, RIM and Apple.
Why has HTC grown so quickly? What is it about Taiwan, about being headquartered here, that has made this company successful? The first answer is that Taiwan has been mad for mobile for a long time now. In 2002, for example, Taiwan became the first country ever to have more mobile phones than people. Taiwan’s cellular networks have also provided widespread third-generation wireless communications coverage for years, making connections easy for data-oriented smartphones. In 2008, adoption of 3G in Taiwan reached the point where sales of 3G devices accounted for 49.7 percent of total cellphone market volume.
The second answer to the “why Taiwan” question can be found in the experience of the generations of ICT hardware designers, engineers, managers and production workers on the island. From its years of making everything from motherboards to monitors, from chips to computers, Taiwan has a wealth of people whose entire careers have been dedicated to banging out ICT products. Part of a supply chain that today extends to mainland China, the deep experience of employees at local companies like HTC enables them to determine whether suppliers can provide the components necessary to turn a design concept into a product suitable for mass production.
True, Japan and South Korea can claim a similar human resources/supply chain advantage, but this leads to the third answer to the “why Taiwan” question: Taiwan’s distinctive ability to rapidly innovate. With people who are both extremely focused on efficiency and intimately familiar with the complete ICT supply chain, Taiwan can quickly produce game-changing technology such as Asus’ Eee PC, the first working netbook prototype for which was churned out in an amazing 28 days. Imagine one inspired HTC employee holding a PDA in one hand and a cellphone in the other, and it would not take all that long to meld them together into one device. And that was exactly what happened: in early 2001, HTC reached an agreement with Microsoft to develop a new generation of cellphones based on Windows Mobile, and by March of that year, HTC had delivered the world’s first fully functioning, Microsoft-powered smartphone prototype.
After a company decides to break away from its OEM past, what is the next step toward becoming a global brand? The obvious answer would be launching a memorable advertising campaign, something that Taiwanese companies have been notoriously shy about in the past. HTC, for one, put its wallflower days behind it at the end of October when it launched its “YOU” campaign, in which its television commercials reminded cellphone users “You don't need to get a phone. You need a phone that gets you.” These ads are scheduled to air in 20 markets worldwide for a total of six months. The media carpet-bombing has been so extensive in the United States, for example, that HTC aimed to put its brand before 95 percent of adult cellphone users 36 times before Christmas via television, billboards and advertisements plastered on buses. Brilliant, perhaps, but quiet no more.
—Donnall Argent is a freelance writer based in Taipei. These views are the author’s and not necessarily those of “Taiwan Today.”
Copyright © 2009 by Donnall Argent
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