HTC 2007 Annual Report Download - page 109

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213212
A REVIEW AND ANALYSIS OFTHE COMPANY'S FINANCIAL CONDITION
AND OPERATING RESULTS,AND A LISTING OFRISKS
application execution speeds. Their
functionality allows for mobile, around the
clock information management through
wireless communication networks, and based
on a converged handheld device, applications
can take on new functions for different
industries. That gives these devices great
expandability and the outlook is for increased
market demand in the future.
Negative factors for HTC's developmental vision and
countermeasures
As converged handheld devices become more
standardized, the prospects for future market
development have been attracting the attention of
potential competitors around the world, who are
investing in the market. Parts and component
vendors have also begun to provide modular,
integrated products, further lowering the market
entry threshold for potential competitors. And as the
post-information age progresses and major
companies such as Apple Computer scramble to
invest in the development and production of related
products, we expect those products to have even
broader applications, more diversified functions, and
shorter life cycles, while the competitive dynamics
within the market become better defined. HTC's
countermeasures to all of these factors are as
follows:
> Focus on R&D and innovation, continue to
enhance R&D results, and shorten product
development cycles to maintain our leading
capacity for development of new product
models; employ product differentiation to bring
price advantages and avoid price competition
for mature models. The HTC Touch Series
represented a more consumer-market
oriented product, so we can expect innovative
R&D to provide more user-friendly converged
handheld devices with ever-greater
functionality.
> Continue to expand our comprehensive
service to existing customers, from product
design, mass production, logistical support,
distribution, and after-sales service, as a
means of seeking strategic alliances with
major manufacturers around the world that will
allow HTC to stay one step ahead of the
global market and take on a broader and
more constructive role.
> Plan to establish a global materials supply
chain and back-end support as part of a
production and sales model for globally based
operations. Purchasing costs can be lowered
through volume purchasing; materials
inventory and future demands can be better
grasped by improving the material
VII
6.THE SECTION ON RISKS SHALL
ANALYZE AND ASSESS THE
F
OLLOWING MATTERS DURING
THE MOST RECENT
F
ISCAL YEAR
AND AS THEY STOOD ON THE
DATE O
F
PRINTING O
F
THE
ANNUAL REPORT
(1) Comp
e
t
i
t
i
v
e
N
i
c
h
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s, Pos
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t
i
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e
a
nd N
e
g
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t
i
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Fa
c
t
ors
f
or Our D
e
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e
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opm
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a
l
V
i
s
i
on,
a
nd
R
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spons
i
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e
M
ea
sur
e
s
The key competitive factors in the industry, as well
as for HTC products, are R&D capabilities, the
capacity for innovation, and the ability to foresee
market trends. In addition, HTC's globally deployed
business development capabilities, lean production
management, and global logistics management give
the company a powerful array of competitive
advantages.
Factors beneficial to HTC's developmental vision
> Compr
e
h
e
ns
i
v
e
dom
e
s
t
i
c
i
ndus
t
ry
i
n
f
r
a
s
t
ru
c
t
ur
e
In recent years, Taiwan's industrial system
has acquired greater breadth through the
aggressive efforts of both the public and
private sectors. As a result, the majority of
parts and components such as printed circuit
boards, resistors, capacitors, chipsets, power
supplies, and molds are self-supplied. This,
together with an abundance of engineering
technicians, has allowed the domestic
personal computer industry to use its niche
advantages in automated mass production,
reasonable cost structures, rapid response,
operational management expertise, and fast
delivery, along with the trend toward
international division of labor, to make Taiwan
a major production stronghold for the global
information industry.
> Con
t
i
nuous grow
t
h o
f
t
h
e
m
a
r
k
e
t
br
i
ngs
d
e
v
e
l
opm
e
n
t
po
t
e
n
t
i
a
l
With continuing change and innovation in
products, advances in key parts and
components, and new software vying to
replace the old, product applications grow
broader by the day. Market research reports
forecast that over the next few years, markets
for products that HTC plans to put into
production will enter a period of rapid growth.
These external market circumstances present
HTC with an opportunity to realize our great
potential to the benefit of the company's future
development.
> Produ
c
t
n
i
c
h
e
s
Converged handheld devices are not only
compact and portable but provide fast
SPECIAL N OTESI RISK EVENTS
l