REV: DECEMBER 8, 2009
DAVID B. YOFFIE RENEE KIM
HTC Corp. in 2009
Peter Chou, HTC Corp.’s Chief Executive Officer, returned to Taiwan with a sense of exhilaration and pride from Mobile World Congress 2009, the world’s leading exhibition for mobile phones. HTC generated a buzz for revealing two new handsets, as well as surprising the world with the announcement of HTC Magic, the second phone that ran on Google’s new mobile platform, Android. As Chou claimed, “We got lots of press exposure, high visibility, and the response was very positive. It was the best show we had ever attended.”1 Indeed, Chou felt that HTC was gaining more respect as a leading manufacturer of mobile phones. Twelve years ago, the company started out as a relatively obscure Taiwanese firm that made personal digital assistants (PDAs) for other companies. HTC then transitioned into the fast growing smartphone category - high-end mobile phones that could do everything from e-mail to Internet surfing to playing digital video. Dedication to innovation and perseverance had elevated HTC into the world’s leading manufacturer of smartphones that ran Microsoft’s Windows Mobile operating system. Revenue had surged to $4.5 billion with sales in more than 70 countries. Historically, HTC had stayed in the shadows by selling high quality, unbranded phones to cellular phone manufacturers and wireless network operators. Then in 2006, HTC made the risky decision to start branding phones under its own label, a path that many Taiwanese manufacturers had tried, but failed. So far, the new strategy seemed to pay off. However, the HTC brand name still had a long way to go. Chou now wondered—”What should we do to become a powerful, global brand like Nokia or Samsung Electronics?” HTC had also benefited enormously from its long, close relationship with Microsoft. However, the landscape for phone software was changing. Apple, Research In Motion (RIM), Palm, Nokia, and Google were flooding the market with new, ground-breaking products. Moreover, every major vendor was launching an app store or related services, such as music or GPS. Chou openly questioned, “Where should HTC participate in this expanding value chain? What should we do to make HTC unique in one of the most exciting, innovative categories in the technology world?”
HTC was founded in May 1997 by H.T. Cho and Cher Wang in a windowless office located in Taoyuan County, Taiwan. Cho, a soft-spoken, seasoned Taiwanese engineer, had devoted the majority of his career working for Digital Equipment Corp. (DEC), an industry leader in mini computers. As one of DEC’s top engineers, Cho had built a solid reputation for himself for his quality consciousness, passion for excellence, and keen attention to details. The two founders had first met when Cho was searching for a motherboard vendor to manufacture a new PC at DEC’s Taiwan plant. ____________________________________________________________
Professor David B. Yoffie and Research Associate Renee Kim prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2009 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.
HTC Corp. in 2009
He ended up selecting First International Computer Inc., a company run by Cher Wang’s older sister, Charlene Wang. Cher Wang, who was overseeing the PC division’s international accounts, became impressed with Cho’s technical competence and skills throughout the...