Htc Homework Assignment

Evaluate HTC’s performance as outlined in the case. What are the competitive advantages and disadvantages?

HTC was founded in May 1997 in Taiwan. HTC’s main focus was on PDAs; however, PDAs being a distant concept then, it was very difficult to find skilled engineers. Even then, HTC managed to create world’s first pocket size PC with Microsoft a year later. In the meantime, HTC’s notebook business struggled and by 1999, HTC had a loss of $18 Million. HTC registered profits for the first time in 2000 with the launch of iPAQ, their new PDA. HTC went a public company two years later. It was now necessary for HTC to think of a new growth platform. HTC collaborated with Microsoft to launch the first windows smartphone, XDA in 2002. It stood out in the market as being a tailor-made handset for a network operator. By 2004, HTC’s R&D revenue had reached 5% of the total revenue compared to the 2% of other Taiwanese hardware companies. HTC focused on customized products, which increased the average unit cost of components. Operators, on the other hand gained a greater sense of control over their products. The profit margins of HTC soared to 20% compared to an industry average of 5%. Between 2003 and 2006, HTC’s share price had surged a 1000%. By 2006, HTC shipped 70% of world’s windows smartphones. HTC also started to collaborate with Google’s Android operating system in 2006. In 2007, HTC started the brand strategy, with HTC branded phones available for sale in Europe and Asia. However, entering the US market was a challenge for HTC. In 2007, HTC launched its touch phone before Apple, giving direct competition. In 2009, HTC was the 4th largest smartphone manufacturer with $4.5 Billion in sales.

Competitive advantages:

1. In 2007, HTC launched its touch phone just before iPhone was launched in the market. This gave a direct competitive advantage to HTC, which could differentiate itself in the market.

2. HTC had invested a lot in their R&D and...