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HTC Expands Business Beyond Cellphone Manufacturing

15 July 2011

After transforming itself from a contract manufacturer of cellphones into one of the world’s leading smartphone brands during the past few years, HTC Corp. now is embarking upon the next stage of evolution, focusing on expanding into the automotive realm and establishing itself as a supplier of location-based services that developers can use as platforms.

HTC’s evolution into a cellphone brand has yielded huge dividends. In its latest financial results at the end of April, HTC announced that device shipments grew 192 percent year-over-year to 9.7 million units. Company revenue climbed 174 percent to $104.16 billion New Taiwan dollars (roughly US$3.62 billion), up from NT$38 billion last year, with average selling price per unit at an impressive NT$359.

While HTC offers Windows Phone 7 devices, the majority of its devices are based on the Android operating system. Microsoft has put strict guidelines on not only the physical specifications of Windows Phone 7 devices but also on the user interface, which must stay virtually unchanged regardless of device. In contrast, Android provides developers and handset makers alike an open platform to differentiate their products from the competition.

Location services to stand apart
While HTC has supported on- and off-board navigation applications either through carriers or third-party developers like TomTom for many years, the company started to embrace location services more fully with the introduction of the Touch Cruise in January 2009. That Windows Mobile 6.1 phone featured HTC Footprints, an application that enables users to permanently chronicle favorite places and locations by recording location information and geotagged content on their phones.

Though Android features a host of location-based services, Footprints is still included in HTC Android devices, allowing users to view locations on Google Maps for Mobile and launch into Google Maps Navigation. As such, Footprints provides HTC with an opportunity to achieve differentiation from the Android competition.

HTC went one step further in September 2010 with the introduction of the Desire HD and Desire Z phones. These two devices were the first to include a new service called HTC Locations, which renders user networks independent by storing map data on the phones.

Automotive also gears up
The newest area of interest for HTC is the automotive sector. At the Geneva Auto Salon this year, automaker Rinspeed introduced its BamBoo concept equipped with a VDO display as well as an HTC Flyer, with a docking station for the passenger.

HTC, however, is not the first smartphone maker to display concepts integrating a tablet in the dash.

At CES 2011, QNX displayed a Blackberry PlayBook as a connected screen for the passenger of a vehicle, with content controlled from the driver position, the handset and the tablet.

In Shanghai, Dongfeng Yulon, a joint venture between Dongfeng Motor and Taiwanese OEM Yulon, displayed the Luxgen 7 SUV featuring the Think+ telematics system supplied by HTC. The SUV comes with the voice-activated Think+ onboard computer system, offering remote diagnostics, video and audio entertainment, telecommunications and GPS navigation functions. The system is linked with Luxgen’s operator center to provide telematics services including maintenance notices and emergency assist.

Positioning for growth
HTC has seen tremendous growth in its handset business, fueled in large part by the Android platform. Now the company is positioning itself as an essential part of the mobile value chain with the development of its own premium features like HTC Locations, as well as developer programs that will allow applications to be tied tightly into the HTC branded user experience.

Equally, HTC is going beyond the handset and looking to the vehicle for further expansion of its ecosystem. For instance, the implementation of Terminal Mode in vehicles will allow HTC to augment the user experience into the car.

Finally, HTC’s efforts clearly illustrate a new fact of life in the world of smartphone makers—that it isn’t enough to utilize any ecosystem, as is. Moreover, the capability to cultivate consumer and developer loyalty, as well as generating appeal via premium content and developer support, is essential for any company to distinguish itself in this market.

Read More > Automotive Research Portal—Infotainment—Europe

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