HTC will stick with Android, continue to pursue acquisitions – CEO

Taiwanese smartphone maker HTC Corp. will stick with Google Inc.’s mobile software despite the software giant’s planned acquisition of competitor, Motorola Mobility Holdings Inc., and will continue to pursue acquisitions to grow, its chief executive said Friday.
In an interview, Peter Chou downplayed the possibility that HTC would develop its own operating system, saying the company’s goal is to “leverage partnerships” with Google and Microsoft Corp., while creating differentiation from other smartphone makers.

“I think there’s a lot we can do…it’s not the operating system, it’s the ecosystem…so we think we can find a way to differentiate to add value, but at the same time leverage our partners, Google and Microsoft, since we have such a great relationship with them,” Chou told Dow Jones Newswires in an interview at the company’s headquarters.

The comments came as Google announced plans earlier this week to purchase Motorola Mobility for $12.5 billion, raising questions for many Asian handset makers including HTC as to whether they can continue to work closely with Google on software for smartphones. Google’s Android is an open-source software that many manufacturers have been adopting in their smartphones because it’s free. Android currently comprises 47.7% of the global smartphone market compared with Apple’s iOS software which had an 18.5% share as of the second quarter, according to researcher Strategy Analytics.

HTC, which has grown from a relatively unknown contract manufacturer to a globally recognized smartphone maker offering phones based on Microsoft and Google software, has announced several acquisitions this year to beef up its offerings in video, audio and cloud computing technology. As of July 29, the company had cash and cash equivalents of NT$116.44 billion (US$4.01 billion). Its second-quarter earnings more than doubled to NT$17.52 billion (US$602.5 million) from NT$8.64 billion a year earlier thanks in part to the popularity of its Android-based smartphones.

Chou said Google’s purchase of Motorola Mobility is a positive development for HTC as it would help Google grow its patent portfolio and better protect its Android operating system from intellectual property lawsuits, which have been spreading across the smartphone industry. HTC has been embroiled in several lawsuits with Apple, with both sides alleging that each company has violated the others’ patents.

“This acquisition is more to enhance Google’s patent portfolio, to support us, to protect us, so this is good news,” he said.

Chou said he has confidence in HTC’s relationship with Google. Google has made “very, very clear” its commitment to HTC remains unchanged, he said.

In terms of acquisitions, HTC plans on focusing on software and innovation, Chou said. HTC said last week it is acquiring a majority stake in Beats Electronics LLC, a high-end headphones company. It also said in July it is acquiring California-based S3 Graphics for US$300 million.

On Friday, HTC shares closed at their lowest point since October 29, 2010 at NT$719.00 on investor concerns over the growing legal battle and growing competition in the smartphone sector.

Chou said HTC is seeking to expand its engineering, software and design staff, without giving specific figures. As of June 30, HTC had 11,464 employees.

courtesy: total telecom