HTC 2007 Annual Report Download - page 111

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A REVIEW AND ANALYSIS OFTHE COMPANY'S FINANCIAL CONDITION
AND OPERATING RESULTS,AND A LISTING OFRISKS
products, which will benefit the development
of HTC products that incorporate its core R&D
technology. In addition, HTC will work closely
with international telecom providers to launch
new products, giving HTC a major role in the
global wireless communication field and good
business development opportunities. The
development of brand business will also bring
HTC closer to its market and clients.
• HTC will continue to effectively use its capital
and relevant resources for the acquisition and
development of new technologies, and also to
attain higher product quality, to bring it all
possible competitive advantages. HTC stays
informed about technological development,
and will continue to develop products with the
latest technology in order to meet market
needs and to obtain recognition from
cooperating partners and the trust of
investors.
> Effect on the company's crisis management of
changes in the company's corporate image,
and measures to be taken in response :
• HTC strives to maintain a high standard of
professional ethics and business operations
management. HTC is governed by a code of
VII
and measures adopted in HTC's Procedures
for the Acquisition or Disposal of Assets.
> Research and development work to be carried
out in the future, and further expenditures
expected for research and development work
:
• HTC's R&D plans for the most recent fiscal
year focused on the research and
development of user interface and mobile
Internet products, and the provision of
technical support and after-sale service for
those products. R&D achievements to date
include the HTC Touch Diamond, a new
product launched in May 2008 as the first
smart phone in the world with a 3D user
interface on the Windows Mobile 6.1
operating platform. Another product currently
under R&D is an Android platform device,
projected for launch in Q4 2008. Looking
ahead, HTC will continue to innovate and
develop new products to provide more
customized services that will meet customer
needs. To ensure the company's R&D
competitiveness, projected R&D investment
costs for fiscal 2008 will be approximately 3 to
5 percent of the operating revenue for the
year.
SPECIAL N OTESI RISK EVENTS l
> Effect on the company's financial operations
of important policies adopted and changes in
the legal environment at home and abroad,
and measures to be taken in response. :
• Aside from the organizational changes and
ancillary measures mentioned above to
strengthen corporate governance, the major
policy and legal changes at home and abroad
in the most recent fiscal year had no material
impact on HTC finances or operations. In the
future, HTC will remain abreast of relevant
information in this area and formulate the
requisite responsive measures to meet the
company's operational needs.
> Effect on the company's financial operations
of developments in science and technology as
well as industrial change, and measures to be
taken in response. :
• Wireless communication is the latest trend in
information technology, and converged
handheld devices are one of the typical
mainstream products for wireless
communication applications. With the rise of
the mobile Internet, transmission platforms will
gradually migrate to the 3.5G transmission
standard. HTC adapts to changing trends with
in product development and changes in
corporate integrity and ethical standards and
its management team tolerates no unethical
acts or lapses in integrity.
> Expected benefits and possible risks
associated with any merger and acquisitions,
and mitigation measures being or to be taken
:
• As of the printing date of this annual report,
HTC has no new acquisition plans.
> Expected benefits and possible risks
associated with any plant expansion, and
mitigation measures being or to be taken :
• To meet global market demand for converged
handheld devices, HTC is continuously
reviewing and improving manufacturing
processes to boost production capacity and
quality while reducing costs. To alleviate the
problem of insufficient capacity, HTC's Suzhou
plant in China came online for OEM
production two years ago, and planning has
begun for the purchase of real estate plant
construction in Shanghai's Kangqiao Industrial
Park. HTC also carefully selects outsourcing
vendors and has increased partial outsourcing
of production to increase the flexibility of its
production capacity.