High Tech Computers (HTC), developer of mobile phones and smart phones, is one of Taiwan's amazing companies. If you have been sleeping under a rock, an HTC smart phone is the base for the Google Android smart phone.
The China Economic News (CENS) reported earlier this month HTC is doing incredibly well this year. According to CENS:
The Taiwan-based High Tech Computer Corp. (HTC), a world-caliber supplier of own-brand handsets, forecasts its annual revenue to smoothly hit a historical high of NT$150 billion for 2008, based on a strong revenue growth of over 30% realized in the past eight months of this year, according to Cheng Hui-ming, HTC`s chief financial executive.
Thanks to its hot-selling HTC series smartphones, HTC is expected to post aggregate revenue of NT$105.3 billion for the first three quarters of this year, and score revenue NT$48.8 billion in the fourth quarter, thus achieving annual revenue of about 154 billion for entire the year, sharply up from NT$118.6 billion posted last year.
In the meantime, the Wall Street Journal (WSJ) has an excellent article on the advent of the Smart Phone and the rise of new providers. The WSJ observes:
The U.S. market for smart phones continues to be a tough nut to crack for the established handset makers.
Top-tier players such as Nokia Corp., Motorola Inc. and Samsung Electronics Co. control 80% of the market for cellphones but have struggled in the U.S. to sell smart phones -- phones that allow users to surf the Internet, send email and download music, among other advanced functions.
Often caught up satisfying carrier demands, handset makers have been slow to bring out products in this segment, opening the door for the likes of Research in Motion Ltd. and Apple Inc.
This could prove a crucial error for the traditional players, as they cede the fastest-growing and most profitable slice of the market. "They're really missing out on a critical high-end segment," said Hugues De La Vergne, an analyst at Gartner Inc.
It could be painful for the large handset companies because their strategies are predicated on selling more-expensive high-end phones to complement sales of cheaper mass-market phones, propping up the companies' overall margins. But consumers are turning away from high-end feature phones, which offer one or two special functions, and opting instead for a full-blown smart phone.
Smart phones are where the growth is. More than 35 million smart phones are expected to sell in the U.S. this year, up 77% from a year ago, in a market worth $11.8 billion, according to Gartner. By 2012, the market will be worth $29.2 billion, with nearly 100 million units sold.
Later on, the WSJ comments on HTC saying:
It is no coincidence that Taiwan-based High Tech Computer Corp. has decided to start pushing its HTC name after years of making unbranded phones for the carriers -- its Touch Diamond is among the most highly anticipated devices.
HTC is working with Google Inc. to bring its first Android smart phone out, dubbed Dream.
The newer players can be more nimble and solely focus on the smart-phone market. But the handset makers aren't standing still. Both Motorola and Samsung vow to expand their smart-phone offerings in the second half and next year. "The iPhone has woken the entire industry up in a big way," Mr. Hurd said.
What happened here? It seems the traditional players didn't really keep taps on the market. They never anticipated new entrants (HTC), they never anticipated subsitute products (Smart Phones) and the buyer power was too strong (the carriers). Three of Porter's five forces went against them and they clearly didn't anticipate the impact of the smart phones on their business. There is a lesson here that companies really do need to keep their eye on the ball to see what new products and technologies are becoming available and how those technologies and products will affect their business.
Here in Taiwan HTC is a highly respected company and right now they are going from strength to strength.
CENS: HTC Eyes Record Revenue of NT$150 B. for 2008
WSJ: Smart Phones Challenge Firms
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