Giz AU's Interview With HTC CEO Peter Chou - Part II

Horace, Nick & Peter - HTC.JPG

Here's the second part of the interview that Giz AU had with CEO of HTC last week. If you want to read the first half, you can find it here.

In case you were wondering, Peter Chou is the guy to the right of me in the picture above. The other guy is Horace Luke, who was going to join in on our discussion, but had to run downstairs to sort out the launch of the Diamond.

In any case, check out the interview transcript below:

Giz AU: You've mentioned the iPhone a few times - one of Apple's strengths is having lots of 3rd party accessories. Is that something that HTC is either developing themselves or in discussions with other companies to develop?

Peter Chou: We actually provide some design guidance to some 3rd party accessory makers. But we have some of our own - for example some docking cradles, these are from us. But there are 3rd party offerings - for example Bluetooth headsets or a lot of others. But Apple of course is very, very strong with their iPod accessories.

Giz AU: Apple with the iPhone 3G have announced the price is going to be quite low for a smartphone. Is that something HTC is going to be looking at?

PC: Actually, we try to position ourselves as the partner of mobile operators. So we try to respect what our mobile operators, their strategy, the way they position that. But sometimes it's quite misleading in terms of price because the supplier's device, its price is subsidised by mobile operators. But mobile operators will get even after all, because if they subsidise more, the monthly fee, the contract you have to buy, is a different contract.

So what you really have to think is the total cost of ownership. And then you will know instead of just the advertised price. There's a lot of devices out there that are just one dollar. One dollar phones. But it's not that the phone is one dollar, it's actually that the mobile operator has subsidised that.

So we think we have a fair subsidised strategy from mobile operators. So if they don't subsidise this device, then much better contracts will be very, very attractive. We genuinely believe that our total cost of ownership is actually much more competitive. And we believe that the device alone is a lot more attractive than iPhone.

Giz AU: Onto HTC in general. When we met last year, HTC was only just beginning to sell its own products direct to consumers. How's that going?

PC: I have to say that last year was a very good year for us. We experienced very strong growth and our brand awareness increased a lot. So we are actually doing business in Europe, in US in Asia - everywhere, including Japan. So the HTC brand is growing quite well. Today we are shipping 80% of devices are actually HTC branded.

Giz AU: And in the marketplace? You would have done research to discover how well the HTC is known among smartphone users?

PC: We have not really gone on to do that research yet. It will probably take a while to do that kind of research. But I believe that HTC is quite highly recognised today in this kind of touch and smartphone area. We are probably maybe top 3 in the world right now in the second half.

Natasha Wright (HTC Australia PR): Just on that note - I saw some data yesterday: In smartphone converged technology in Australia, we're number three. That isn't "brand health check" surveys, that's more understanding units being shipped into Australia, and we are number three in the converged space. We're number 3 and we're only marginally behind blackberry. 1 percent for Q108 shipping, Blackberry's only 1 percent ahead of us.

Giz AU: Who's number 1?

NW: Nokia.

Giz AU: There was a report a few weeks ago that HTC would be expanding the UMPC or developing the UMPC into the mini-laptops; taking the Shift and the Advantage and moving it more into the Eee PC space. Is that correct?

PC: No, what I actually said was that we are working on our roadmap on that category. And because the Eee PC is in the middle, we're really working on our product planning. The Eee PC is actually a quite cheap device. It's not a kind of strong, professional device; you can't really do a professional job with the Eee PC.

So we are actually working on our strategy on how our roadmap should be, because we don't want to be competing with Eee PC. However, there are a lot of products in there, so a lot of people get confused with that kind of category, so we're actually working on our strategy to see how we differentiate ourselves in the future.

Giz AU: Will you be targeting a more professional userbase then?

PC: What we would like to ensure is that we leverage our strengths in this kind of mobile, wireless, you know - a holistic, integrated kind of experience. It's not just cheap, cheap, cheap.

If you go to use the Eee PC, that experience is not that good. But some people are driving costs down. And of course we want to make sure that we have a very competitive price as well in that category, otherwise it's just very difficult to be able to be there.

We're going to make sure that we have a formula: competitive price but very differentiated offering of experience... we're still working on it, I cannot talk that much...

Giz AU: Is that something that we'll be seeing anytime this year?

PC: No, not this year. Next year.

Giz AU: I'd love to get your insights as to where mobile phone technologies are going in the future. What's next?

PC: I think mobile Internet.

Giz AU: Mobile Internet?

PC: Mobile internet is going to be... I think it's probably going to be the most important thing in mobile.

Our vision is that we really want to offer - actually, this is something we're doing on the Diamond - to make sure that we offer a very simple, intuitive mobile internet experience. In the past, there are a lot of devices that claim they have a mobile browser, but you know, you don't really want to use it, so difficult is the experience. But this time, we're really offering that kind of, boom, boom, boom... that kind of zoom in, zoom out, panning and scrolling and linking - all of this we've really tried to do with "one hand, one touch".

We think that we have the lead to do a really good job, to transfer the primary internet experience from a desktop to a mobile device. If that happens, I think that there are a lot of things that will be changing, a lot of innovation will be coming, a lot of services - innovative services. And the people's perception of what they can do with this device will be changed. And this will become the mainstream computing device. And this global internet will become their day-to-day part of their life, and that will change.

So that's much more important that one of the features or one of the functions for a phone - there's a whole ecosystem we're changing.

Giz AU: How much of that will be network based and how much of that will be handset based? How long before that mobile internet experience becomes ubiquitous?

PC: I think it will be starting from this year. Mobile operators will be very excited by this and will be pushing it, and we'll have better and better products coming out so people, consumers will start realising, "Okay, I can really do internet with this device".

And innovative services will be coming and more products will be coming, so there are a lot of good things coming out. But mobile Internet isn't just about browsing. Actually, what we call it is "transparent mobile internet experience" which means we customise, for example, YouTube, or that kind of application.

We've got widgets, which means you are not browsing the typical desktop internet. It's a dedicated, customised internet experience on this device. For example like Youtube, like the weather we have here. This weather, the information is actually coming from the web. But you don't feel the browser - that is transparent for consumers. That kind of application works in the background. So there's room for us to innovate, to do more.

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