HTC CEO Peter Chou Live at D8
HTC, a company that once built devices for other brands, is today a powerful brand itself. And CEO Peter Chou is largely responsible for that. Over the past few years, Chou has transformed HTC from a contract handset manufacturer into a smartphone powerhouse, a company that ranks behind only Nokia (NOK), Research in Motion (RIMM) and Apple (AAPL) in global smartphone shipments. That’s quite an achievement and one attributable to the very early, savvy bet Chou made on Google’s (GOOG) Android mobile operating system.
But that same bet has gotten HTC into trouble as well, most notably a high-profile lawsuit from Apple alleging that a number of HTC’s Android devices infringe patents related to the iPhone’s graphical user interface, underlying architecture and hardware.
11:55 am: How many of you have an Android phone, asks Walt, directing his question to the audience. If you do, it’s likely to have been made by HTC. And with that, Walt welcomes Chou to the stage.
11:56 am: Walt notes that when he first encountered HTC it was an OEM. How did you get from there, he asks Chou, to where you are now, where your brand is actually on the phone?
Chou: It was a great journey for us. We started with a vision of mobile convergence and how smartphones would change people’s lives. That vision excited us, so we focused on innovations in technology and tried to deliver on that vision. Over the years, we began partnering with companies like Microsoft, 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 (S) EVO. So we’ve been in this industry for a while. But we needed a brand identity. Without that, it was difficult to communicate our vision to the market.
11:59 am: Walt–Other than 4G, what’s innovative about the EVO?
Chou: It has a breakthrough display, it’s much bigger, it’s clearer. It has an eight-megapixel camera and a front-facing camera as well. It’s the first device in the U.S. that people can use to make a video call. It’s also a hotspot; you can use it to create a Wi-Fi network.
12:01 pm:: Walt likes the device’s kickstand. It turns it into a sort of mini-TV. He draws a comparison with the Dell (DELL) tablet we saw yesterday and notes that that device’s screen size is not much larger than the EVO’s.
12:02 pm: Walt–So this is an Android device. You’re still making Windows phones, but are you making more Android phones now?
Chou: We’re committed to both platforms. We want to design great products for both. Different people like different things, so what we try to do is get a good mix of technology and design. And Android and Windows cater to different users. Windows users tend to like Windows. They are loyalists. Windows has a lot of value.
Walt: What about Android?
Chou: Android provides a different Internet experience. It caters to people who are interested in things like social networking, he says.
12:05 pm: Walt wonders why, if HTC is committed to both platforms, it doesn’t differentiate its handset design. The company’s Windows phones look a lot like Android phones. There’s an HTC layer on them–HTC Sense.
Chou: Well, what we do is try to add value on top of Android and Windows. HTC Sense focuses on things like the social networking experience. Our philosophy is that we don’t force the customer to take what we offer; they have the freedom to personalize their devices.
Walt: So you can take HTC software off these phones?
12:07 pm: Walt–Is there a consumer awareness of your brand? When customers buy a Nexus One, do they know it’s made by HTC?
Chou says they do. Since last year, the company has been working on brand positioning, and that has bolstered consumer awareness of its offerings.
12:08 pm: Chou offers an anecdote about meeting a guy at an airport and comparing HTC devices with him. “I think the HTC name is getting more awareness.”
12:09 pm: Walt–Do you think it’s confusing to customers that there are now three brands involved in a phone: The carrier, the manufacturer of the phone and then the operating system? Can you have too many brands on a device?
Chou: This is an ecosystem. We have a lot of stakeholders. We’re trying to minimize that a little bit, by putting some of those logos on the back.
12:12 pm: Walt–Talk a bit about this concept of a lower-tier of smartphone device.
Chou: Our vision is to bring the smartphone to the mass market…We believe the smartphone is improving people’s lives, so we’re trying to offer it to more consumers, but sometimes, smartphone prices are too high, even with carrier subsidies. And mass-market consumers sometimes perceive smartphones as overly complex devices, so we’re trying to bring prices down and simplify devices at the same time. We’re doing this with the HTC smart. This is a $150 phone [as opposed to the typical $400 smartphone].
Walt: Is HTC Smart an Android phone?
Chou: No. It uses Qualcomm (QCOM) BREW.
Walt: Does it have a different Web browser? Is it as good as WebKit?
Chou says it’s not–at least not yet. He says the device has been relatively well received though. He also notes that given the low price, it can be offered by carriers at very low prices.
12:17 pm: Walt–Is there fragmentation in Android? Some app developers tell me Android’s landscape is too cluttered. Is HTC Sense making this worse?
Chou: HTC Sense is not causing the problem here. We try not to fragment. All apps can run on HTC Sense. There’s no fragmentation, though there may be confusion there. The operating system itself may cause a bit of a problem. But it’s a small one…and it occurs more with older devices. We try to be careful to do good porting on our devices …
Questions & Answers
Q: What are you doing to improve battery life in these new devices? [Walt notes that the EVO’s battery runs down “alarmingly fast”]
A: We understand that if your a heavy mobile user, the battery is a concern. The EVO’s battery is removable–not like the iPhone. [I think he’s suggesting that users carry an extra one.] We are trying to innovate here. We’re aware of the problem. I hope someday this won’t be an issue.
Q: Any other phones in your pockets?
A: Chou chuckles.
Q: Can you talk about HTC’s plans to expand into other areas of electronics–tablets for example.
A: We’re very focused on smartphones today. We’re focusing our business on mobile operators. However, as an innovator, one of our defining characteristics is to create new technologies. So in our labs, we’re developing new devices like the HTC Shift [a tablet, I think].
Q: What’s your take on the Foxconn suicides?
A: I don’t know details about this. What I know is from the news. But this is a very well-equipped factory. There must be something there beyond manufacturing or salary issues, something cultural maybe. Times change, China changes and the value system may have also changed, and working long hours under very strict management may be very tough for some people. I’m not in a position to speak about this though, because we own a factory as well. We value our employees, we treat them well, we treat them as an asset. It’s really difficult for me to comment on Foxconn.
Q: Will you list your stock in the U.S.?
A: We’ve thought about it. But we need to think more about timing. These days, I’m spending most of my time thinking about products. Perhaps with some investment bank help, we can do that.
And that’s a wrap.
A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.