HTC Is Quietly Gaining Prominence In Smartphones
High Tech Computer Corp., a little-known but fast-growing Taiwanese gadget maker, unveiled a touch-screen smartphone, the latest salvo in its surprisingly successful effort to compete against bigger rivals like Apple Inc. and its iPhone.
HTC's Touch Diamond, which was unveiled Tuesday in London and goes on sale next month in Europe, is the company's follow-up to the Touch, which has sold surprisingly well since its launch last June, a few weeks before Apple's iPhone hit shelves. HTC's new phone will be available in the U.S. in the second half of this year.
HTC says it has sold more than three million Touch phones, which is more than half the number of iPhones sold in roughly the same period. 'We think we can do more' with the Touch Diamond, HTC Chief Executive Peter Chou said.
Smartphones basically are small computers that with functions such as email, Internet surfing and Global Positioning System locators in addition to voice calling. The smartphone market is one of the fastest-growing segments of the global cellphone industry. Both Apple and HTC are relatively small players in the market, which had sales of 136 million units last year, according to iSuppli Corp., an El Segundo, Calif., research company. Touch-screen models are among the hottest-selling items.
Other makers of touch-screen smartphones include South Korea's Samsung Electronics Inc. and LG Electronics Inc. Nokia Corp., which is by far the biggest seller of smartphones, is expected to start selling touch-screen models this year.
HTC's Touch Diamond runs on Microsoft Corp.'s Windows Mobile software and is slightly lighter and more compact than its predecessor and the iPhone. It comes with four gigabytes of internal data storage -- half that of the least expensive iPhone -- but has a higher-resolution, 3.2-megapixel camera.
The Touch Diamond supports high-speed transmission using the latest generation of wireless technology, and it is designed so users can surf the Internet using one hand, said Horace Luke, HTC's chief innovation officer.
Apple launched the iPhone with slower wireless technology; it is expected to unveil a high-speed model soon. Apple did not respond to requests for comment.
HTC's success has earned it a role in Google Inc.'s initiative to produce a cellphone using software developed by the Web giant. Mr. Chou declined to give details on that phone but said that work is 'on track' and that HTC expects to release it in the second half of this year.
Pete Cunningham, a senior analyst for Canalys, a London-based research concern, credits HTC with a 'clever strategy' of working closely with wireless carriers. He said HTC benefited last year from the global hype surrounding the iPhone and the fact that its somewhat similar Touch was widely available in markets in Europe and Asia where iPhone had not reached.
While that advantage may fade as Apple rolls out the iPhone in more markets, Mr. Cunningham said the Touch Diamond is a more-competitive product than its predecessor. 'I think it is going to be a very strong product for HTC,' he said. 'They're already well-positioned, and I think they could sell some serious volume on this product.'
Mr. Cunningham noted that HTC and Apple are not necessarily fighting for each other's market share. Since they both are small but growing players in the smartphone market, they are likely to take market share from competitors that have been slower to move on the touch-screen trend, he said.
HTC's success with the Touch has been driven in part by its relationships with a broad range of wireless carriers around the world that offer its phones to their customers, often at subsidized prices. HTC frequently works with more than one carrier in a market and sells its phones separately through electronics retailers.
The approach offers consumers options. The Touch, for example, was sold through retailers when it was launched last year for $499, but it was also available through some carriers free to customers who signed certain service contracts. By comparison, Apple has tended to work with a single carrier in each market it sells the iPhone, taking a share of the carrier's revenue from iPhone users, and it hews to a relatively rigid pricing policy. In the U.S., the iPhone is available only with a two-year service contract from AT&T Inc. The least-expensive model sells for $399, plus the cost of service.
HTC executives said they have arranged to sell the Touch Diamond through France Telecom SA's Orange subsidiary. It will be available through other operators across Europe, as well as in retail outlets, when it is sold next month. The phone is slated to go on sale in some Asian markets in coming weeks and in the U.S. and Latin America in the second half of the year. HTC wouldn't give a price for the Touch Diamond but said it will be similar to that of the Touch when it was launched.
HTC is one of a wave of Taiwanese companies dropping contract manufacturing to build their own brands, often becoming rivals to their former big-brand customers. Acer Inc., for example, has become the world's third-largest personal-computer vendor after Hewlett-Packard Co. and Dell Inc. Asustek Computer Inc., which split off its contract manufacturing operations early this year, is enjoying success with its Eee PC, a low-end laptop that starts at $299.
HTC is still significantly smaller than rivals like Apple, which reported total iPhone sales through March 29 of 5.4 million units, and which makes PCs and other products as well. But the Taiwanese upstart's performance is nonetheless surprising for a company that was founded just over a decade ago and that, until recently, was little known outside its industry.
HTC's Touch Diamond, which was unveiled Tuesday in London and goes on sale next month in Europe, is the company's follow-up to the Touch, which has sold surprisingly well since its launch last June, a few weeks before Apple's iPhone hit shelves. HTC's new phone will be available in the U.S. in the second half of this year.
HTC says it has sold more than three million Touch phones, which is more than half the number of iPhones sold in roughly the same period. 'We think we can do more' with the Touch Diamond, HTC Chief Executive Peter Chou said.
Smartphones basically are small computers that with functions such as email, Internet surfing and Global Positioning System locators in addition to voice calling. The smartphone market is one of the fastest-growing segments of the global cellphone industry. Both Apple and HTC are relatively small players in the market, which had sales of 136 million units last year, according to iSuppli Corp., an El Segundo, Calif., research company. Touch-screen models are among the hottest-selling items.
Other makers of touch-screen smartphones include South Korea's Samsung Electronics Inc. and LG Electronics Inc. Nokia Corp., which is by far the biggest seller of smartphones, is expected to start selling touch-screen models this year.
HTC's Touch Diamond runs on Microsoft Corp.'s Windows Mobile software and is slightly lighter and more compact than its predecessor and the iPhone. It comes with four gigabytes of internal data storage -- half that of the least expensive iPhone -- but has a higher-resolution, 3.2-megapixel camera.
The Touch Diamond supports high-speed transmission using the latest generation of wireless technology, and it is designed so users can surf the Internet using one hand, said Horace Luke, HTC's chief innovation officer.
Apple launched the iPhone with slower wireless technology; it is expected to unveil a high-speed model soon. Apple did not respond to requests for comment.
HTC's success has earned it a role in Google Inc.'s initiative to produce a cellphone using software developed by the Web giant. Mr. Chou declined to give details on that phone but said that work is 'on track' and that HTC expects to release it in the second half of this year.
Pete Cunningham, a senior analyst for Canalys, a London-based research concern, credits HTC with a 'clever strategy' of working closely with wireless carriers. He said HTC benefited last year from the global hype surrounding the iPhone and the fact that its somewhat similar Touch was widely available in markets in Europe and Asia where iPhone had not reached.
While that advantage may fade as Apple rolls out the iPhone in more markets, Mr. Cunningham said the Touch Diamond is a more-competitive product than its predecessor. 'I think it is going to be a very strong product for HTC,' he said. 'They're already well-positioned, and I think they could sell some serious volume on this product.'
Mr. Cunningham noted that HTC and Apple are not necessarily fighting for each other's market share. Since they both are small but growing players in the smartphone market, they are likely to take market share from competitors that have been slower to move on the touch-screen trend, he said.
HTC's success with the Touch has been driven in part by its relationships with a broad range of wireless carriers around the world that offer its phones to their customers, often at subsidized prices. HTC frequently works with more than one carrier in a market and sells its phones separately through electronics retailers.
The approach offers consumers options. The Touch, for example, was sold through retailers when it was launched last year for $499, but it was also available through some carriers free to customers who signed certain service contracts. By comparison, Apple has tended to work with a single carrier in each market it sells the iPhone, taking a share of the carrier's revenue from iPhone users, and it hews to a relatively rigid pricing policy. In the U.S., the iPhone is available only with a two-year service contract from AT&T Inc. The least-expensive model sells for $399, plus the cost of service.
HTC executives said they have arranged to sell the Touch Diamond through France Telecom SA's Orange subsidiary. It will be available through other operators across Europe, as well as in retail outlets, when it is sold next month. The phone is slated to go on sale in some Asian markets in coming weeks and in the U.S. and Latin America in the second half of the year. HTC wouldn't give a price for the Touch Diamond but said it will be similar to that of the Touch when it was launched.
HTC is one of a wave of Taiwanese companies dropping contract manufacturing to build their own brands, often becoming rivals to their former big-brand customers. Acer Inc., for example, has become the world's third-largest personal-computer vendor after Hewlett-Packard Co. and Dell Inc. Asustek Computer Inc., which split off its contract manufacturing operations early this year, is enjoying success with its Eee PC, a low-end laptop that starts at $299.
HTC is still significantly smaller than rivals like Apple, which reported total iPhone sales through March 29 of 5.4 million units, and which makes PCs and other products as well. But the Taiwanese upstart's performance is nonetheless surprising for a company that was founded just over a decade ago and that, until recently, was little known outside its industry.
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