License Plate

Executive summary
Below report first introduce the history of HTC corp. HTC was found in 1997. After around 13 years’ development, HTC has become the key player in the smartphone market.
Even HTC was very successful in the past, but to have the clear understanding of HTC. The report uses the SWOT method to analyze HTC from different perspectives. Then it identifies some issue for HTC both from inside and outside.
Based on the identified the issued, I propose some action to improve the situation or solve the problem for HTC for the further development.

Introduction
HTC Corp. now has become the one of the most successful mobile device companies in the world. It was founded in May 1997. And the company vision was generated just by chance: one day, Cher Wang recognized that “as a woman, it is very important that you carry thing light, everything has to be put inside the device.” Then in HTC’s developed history, it mainly focused on developing a small, handheld, computer-like device. It started with two distinct segments: an ODM business what means that HTC manufacture electronic devices for other companies without HTC’s brand, and its own mobile operator business. And according to HTC’s own forecast there will be no ODM business in HTC from 2010, what shows that HTC will become a pure own branded phone maker in the market.

SWOT analysis
Strength
First of all, HTC had a stable profit level from the running business. According to HTC’s financial information, it gross margin increased from 18% in 2004 to 33% in 2008, when its major competitor Acer, BenQ in Taiwan have critical financial problem. Even compared to the global competitors, for example Nokia, Samsung, Palm, HTC has increasing operating margins. Secondly, as a successful ODM, HTC build-up a good R&D team for hardware development, what could support HTC to develop the new modules in a quick and effective way. Thirdly, HTC’s first Touch attracted enough attention on its own brand smartphone. In 2007, one innovation technology: touch-screen was introduced by Apple. HTC made the best use of this new trend in the smartphone market. More than 3 million Touch phones were sold worldwide with HTC’s own touch-screen. Last but not least, HTC is the first smartphone maker has both Microsoft and Android platform products. In 2006, HTC already started to collaborate with the Google to make the world’s first handset to run on Android. HTC even joined the development of Android. From Google’s point of view, HTC is the initial partner without any questions.

Weakness
At first, HTC is a pretty new player in banded handset market. “HTC” has not been well recognized by the consumers; even they could already use HTC made phones from some operation service suppliers, for example, T-mobile, Vodafone in Europe, Sprint, AT&T in US. One survey even showed at least more 11% consumers from Europe will not consider to by the phones with HTC brand. Then, HTC is the only pure handset marker what owns no operation system. Even HTC took a good position in the smartphone market with Windows Mobile ystem while Microsoft was charging a licensing fee of 8 USD to 15 USD per phone. HTC’s further development could be restricted by the operation system. One day, when Microsoft or Google want to join the smartphone market with their own branded device. Maybe HTC have to pay more licensing fee, and it will have a big impact on the gross margins. One more thing is that, average sales price of HTC’s smartphone is getting higher and higher. It increased from 300 USD in 2004 up to 400 USD in 2008. Price is always the key concern of consumers, if ASP of HTC’s phone keeps increasing in this way. At least, in US HTC have to face the dropped sales figure, since one HTC-sponsored survey shows, 80% of US consumer indicated that they wanted to buy a phone that cost less than 200 USD. It only 50% of the current ASP of HTC’s phone.

Opportunity
U.S. is a huge and undeveloped market for HTC. One survey shows that HTC only get the 2% first choice. And Apple is the no.1 first choice brand got 18%. And if we compared the smartphone between HTC’s and Apple’s . They have quite similar feature: big touch-screen, nice user interface, high speed internet connection, built-in GPS function, etc. Just like HTC did for the first Touch, just follow Apple’s step in U.S. Since apple could generate the trend what HTC’s product could be easily fitted.
Google is famous for its innovation in the internet area. There will no doubt that Android could be further major operation system worldwide. Fortunately, HTC has become the initial partner of Google to develop Android together. It could not only provide the benefit on hardware development, but also give the change to HTC to lead future Android phone’s trend. Then let HTC stand on a good position for the new competition with.
Also as an important partner with Microsoft for Windows Mobile operation system. HTC could be getting better ready for the new system than its competitor.

Threat
The threat from HTC inside:
First of all, it is be the cost threat, we could see a decreased operation margins for HTC from 2007 to 2008. It the cost can’t be reduced, HTC will lose more and more margin via selling more and more devices. Secondly, since there is only one focused business mobile operator business for HTC from 2010, if any bad things happened in the whole market, HTC has no chance to balance it business focus.
The threat from outside:
When other handset makers have more cooperation with Microsoft and Google for the operation system, HTC will not have any other more advantages than its competitors. HTC’s leader position in the market will be challenged easily.

Issues Identification.
As the weakness of HTC what has been analyzed above, HTC is meeting some issues as follows:
1. Brand recognition Since HTC started with ODM business and the whole company history is just around 12 years, the brand of HTC has not been well recognized worldwide.
2. Module cost control Several HTC executives acknowledged that up to now HTC did not have the necessary scale to drive cost down,
3. No self-owned operation system Without self-owned operation system, HTC could be restricted by the operation system owner easily. Furthermore, HTC can’t extend it business scope from hardware supplier to software supplier without the own ship of the operation system.

Solution
For the identified issues, I propose to have the following action:
1. HTC should enhance the contract strategy with operation service suppliers in worldwide. Both of HTC and operation service could attract more consumers via the new feature from new TOUCH diamond. Then win-win situation could happen. Operation service supplier could cover the part cost of the phone, since they could earn more money back from the consumers during the contract period, while HTC could increase market share in some specified regions. The most important things Is that HTC could advertise the brand during the promotion phase.
2. HTC should control the cost in a more efficient way. Hardware platform could be a feasible approach for HTC. Of course, there will be a lot of development cost from beginning. But when the hardware platform is done, HTC could just change something slightly. Most key parts could be kept as same for many different finished good. Consequently, HTC could get better price from it suppliers, since there is a huge volume behind. HTC will have a good position to negotiate the price with suppliers.
3. HTC should develop its own operation system. At least should have unique feature compared to its competitors in the same operation system. Fortunately, for Android system, its owner is the open handset alliance. What means HTC could generate something based on the existing Android system. When HTC has it owned patent, It will could finally lift the HTC brand image.