By Allen Tsai | Fri Jun 04, 2010 4:48 am |
While Apple's iPhone seems always to be in the limelight, HTC's chief executive Peter Chou, in a broad-ranging interview, discussed the meteoric rise of his company, challenges related to brand awareness and the success it has had with U.S. carriers.
Speaking at the Wall Street Journal's All Things Digital technology conference, Chou began by touching on its transformation from a contract handset manufacturer into a smartphone powerhouse."It was a great journey for us," Chou said. "Over the years, we began partnering with companies like Microsoft and Google. Then we shipped the world's first Windows phone, the world's first Android phone, and this week, we introduced the world's first 4G phone, the Sprint Evo." Taiwan-based HTC, which releases its Evo fourth-generation, or 4G, smartphone for Sprint today, will have the rare trifecta of making flagship phones for three of the top four U.S. wireless operators, underscoring how the company has built a reputation as a high-end handset maker in a little over a decade. Demand for the Evo produced lines at some Sprint stores when it was released earlier this week, overwhelming the company's account-activation system. "When you activate this many phones at one time, any carrier is going to see a slowdown, and that's what happened," said Michelle Mermelstein, a Sprint spokeswoman. The fourth wireless operator, AT&T, remains firmly committed to Apple's iPhone for the indefinite future. HTC's growing influence comes as it shifts from designing handsets that use Microsoft's Windows Mobile operating system to emphasizing phones running Google's Android software. The company made the Nexus One, the Google-branded device that was developed to showcase the Internet giant's Android capabilities. "Where there used to be nothing, now they're a force to be reckoned with," said Lois Fagan, head of Sprint's phone selection. Chou quickly added that the company was still producing phones based on Microsoft's Windows Mobile platform. "We've committed to both Android and Windows Mobile, there are different people in the market," Chou said. "Windows has a lot of Windows users -- legacies -- and they are very familiar to the Windows experience. Android appeals to people who do more social networking, and it has good applications, like maps." But he noted that the fragmentation of Google's Android platform "causes a little bit of problem." "Android and Windows address different people," Chou said. "We try to have the best mix of tech and design and we want to give people a choice." When asked whether the similar look between all the handsets caused brand recognition issues, he said that there was a growing awareness about the name. "I was traveling last week and in immigration, they asked me where I work, and then the immigration officer said, 'Oh, I have an HTC phone,'" Chou said. "People are going into stores and asking for HTC products." He said that HTC has tried to separate itself from the crowded market of Android phones by investing more heavily in its own software, building a new "Sense" user interface to work with Google's system, which uses a customized look and collection of widgets to give its devices a unique feel. In 2008, HTC also took a page from Apple's playbook -- pay as much attention to design as its hardware -- by acquiring One & Co., a 20-person San Francisco design studio. While the studio still designs for other products, such as snowboards, to keep their ideas fresh, it now spends two-thirds of its time working on HTC's products. "HTC has really stepped up its software and device capabilities," said John Harrobin, a senior vice president at Verizon. "This bodes well for working more closely with them." In addition, the company focuses on cultivating closer relationships with carriers. The company's U.S. arm, in fact, is in Bellevue, Wash., next door to T-Mobile's headquarters. T-Mobile, the nation's fourth-largest U.S. carrier, remains HTC's closest ally. It introduced the first Android phone with the G1 in 2008. Its current flagship phone, HTC's HD2, runs Windows Mobile software. "HTC has done more with Android than any other manufacturer in the world," said Cole Brodman, T-Mobile's chief technology officer. On Wednesday, T-Mobile released HTC's MyTouch 3G Slide, an update to its MyTouch portfolio of Android devices. When Verizon was looking for a flagship phone to follow its the launch of the Motorola Droid, it tapped HTC for a device "they could go big with," says Jason Mackenzie, HTC's top executive for North America. A couple months later, HTC came back with two designs. Verizon liked one of the prototypes, called the Incredible, and HTC's engineers began tweaking the phone. In early 2010, a few months before the handset's release, Verizon's chief executive Lowell McAdam told HTC he wanted to brand the device a Droid -- a win for the company, since Verizon usually puts the most marketing dollars behind its Droid-line of products. In late April, Verizon launched the Incredible. But consumers have had troubles getting their hands on the highly sought-after smartphone due to underestimated demand and a shortage of components. "We could sell twice as many HTC Incredible phone as we have," said McAdams. Long a manufacturer of handsets that carry other companies' logos, HTC no longer seems content to remain in the background. The company unveiled its first advertising campaign in the U.S. last year and now adds its brand on all its phones. HTC has also drawn the attention of Apple's legal team. In early March, the iPhone maker filed a patent-infringement lawsuit against HTC, a move seen by analysts as an attack by proxy on Google to slow down the expansion of Android phones. HTC has denied the allegations and countersued Apple last month. In addition to having to fight in the courtroom, HTC has mulled over a U.S. listing. "We thought about that. And we think about maybe right timing to see how we do that. It's a lot of process," Chou said. "We hope maybe we can, with some investment banker help, that we can do that." Apple's chief executive Steven Jobs was interviewed yesterday, discussing its war with Adobe over Flash, challenges related to AT&T's network problems and a growing rivalry with Google.
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