HTC, Acer hope for branded success

Merc reporter John Boudreau had a field trip last week to Taiwan. He brought back two interesting stories about Taiwanese ODMs (Original Design Manufacturers) hoping to become branded players in the global electronics industry.

The most interesting of the two was the Q&A with Peter Chou, CEO of HTC, maker of the T-Mobile/Google G1. Chou commented on how HTC spent three years and $10 million developing the new phone, leveraging its Android ties that (perhaps) predated Google’s 2005 acquisition of Android Inc.

Chou: Andy Rubin (Google's director of mobile platforms) and I are friends. We know each other very well. And we know each other's capabilities. We know we can deliver on what we commit to doing. We are quite experienced in the telecom industry and know the quality requirements of mobile operators. That helped a lot. And we have credibility in terms of wireless technology, innovative design and execution.

Q: What has the relationship been like? This is the first time Google's name is being stamped on a product. And you are partnering with an Internet company.

Chou: Google treated HTC well. They saw HTC's value. We have made a tremendous contribution to this. It started from vision — we both are very committed to converged mobile experiences. That made our discussions so easy.

Q: Were HTC employees camped out in Silicon Valley?

Chou: We sent a team of 30 to 50 people to Google for almost one year. They were like Google employees: They had the Google badges and ate the free food. The restaurant there is probably the best employee restaurant in the world, I must say.

Chou expects the smartphone segment to grow to at least 40% of the overall cellphone market in the next five years. Despite being one of (if not the) leading suppliers of Windows Mobile smartphones, Chou is relatively humble about his supplier power and the value of the HTC brand:

Q: Why isn't the Google phone called the HTC G1 from T-Mobile? Don't you lose some marketing punch by calling the device the T-Mobile G1?

Chou: The T-Mobile brand in the U.S. is very high. And T-Mobile is committed to promoting its brand. So it's OK.

The aspirations of leading Taiwanese PC maker Acer are far less modest: become the #1 laptop vendor in the world by 2011. Still, between their acquisition of Gateway and Packard Bell, they’ve already vaulted Lenovo (and its former IBM business) to be #3 in the world.

In addition to Acer, this second Boudreau story looks at other Taiwanese firms. The most visible is Asus, creator of the Eee PC and the whole economy netbook segment. But he also mentions D-Link (a modest success in consumer Wi-Fi equipment) and BenQ (with its disastrous 2005 purchase of Siemens’ failing handset business).