HTC 2009 Annual Report Download - page 4

Financial Performance
Consolidated revenue for 2009 totaled NT$144.5 billion, with a total of 11.71
million units shipped. 3G wireless devices now account for over 95% of total
units shipped. HTC's consolidated gross margin for the year topped 31.9%.
HTC's launch of its global YOU campaign in key American and European
markets raised the consolidated operating expense ratio for the year to 14.9%
- a 1.3 percentage point rise over fiscal year 2008. The consolidated operat-
ing margin for 2009 was 17.0%; pre-tax profits totaled NT$ 25.2 billion;
after-tax profits totaled NT$ 22.6 billion; our net profit margin achieved
15.6%; and after-tax earnings per share (EPS) totaled NT$ 28.71.
Note: Financial forecast numbers for 2009 were not disclosed and thus
cannot be compared to actual achievements.
Key Accomplishments
HTC made good progress along other fronts as well during 2009, including:
>Exceptional Capabilities in R&D and Innovation
Innovation is encoded into HTC's corporate DNA. Following its release
in 2008 of the world's first Android-based mobile phone, HTC in July
2009 launched the world's first Android-based mobile phone-HTC Hero,
which features HTC self-developed HTC Sense user interface. HTC Hero
went on to earn important awards and market recognition, including
Stuff Magazine's "Gadget of the Year", Mobile Choice's "Phone of the
Year", T3 Magazine's "Phone of the Year" and the award for "Best Mobile
Handset or Device" announced at the 2010 Mobile World Congress. By
the close of 2009, HTC had already launched 6 Android phones. In addi-
tion to the 3.2-inch touch screen model, HTC also provides a 2.8-inch
screen compact model and a model featuring a sliding keyboard. This
confirms HTC's market leadership in Android-based smart phones.
In its Windows phone product line, HTC launched in 2009 the HTC HD2,
which features a 4.3-inch touch screen and 1GHz mobile processor. The
HD2 is the world's first Windows phone to incorporate capacitive touch
(touch screen) technology. With high-end product specifications and an
exceptionally smooth user interface, the HTC HD2 has earned strong
reviews and a growing worldwide consumer following. Leadership in
applications for the Android platform and continuous enhancement of its
Windows Mobile-based devices underscores HTC's R&D depth and the
company's uncompromising commitment to and passion for innovation.
Dear shareholders,
Firstly, please accept my heartfelt appreciation for your continued support
and confidence in HTC.
The global financial crisis continued to influence general economic condi-
tions through 2009. While persistently weak economic fundamentals world-
wide dampened momentum for growth in the smart phone sector, smart
phone sales momentum remained strong in comparison with sales in the
overall mobile phone industry.
2009 was a year of major change in the smart phone sector. This was most
apparent in the area of operating systems. Operating systems with excep-
tional third party software ecosystems such as Android OS began this past
year to demonstrate their commercial feasibility and value. 2009 was also
the year when telecommunication service provider investments in 3G tele-
com networks began delivering value through an increasingly diverse array
of mobile digital services and competitive rate plans. These and other
developments are spurring growing numbers of mobile telecommunications
consumers to migrate from traditional mobile phones to smart phones.
HTC has invested consistently and strategically in the development of
exceptional in-house capabilities in R&D and innovation. Today, HTC holds
market leadership in both Windows Mobile and Android platforms. HTC
Sense, our advanced user interface first introduced on Android platform,
was developed from square one with the user in mind in order to deliver a
mobile telecommunications experience that is simple-to-use and highly
intuitive.
"Quietly Brilliant", the message driving our new brand position launched in
2009, commits HTC to design products that enhance life and integrate
seamlessly with consumer preferences and needs. Principal HTC brand
promotion activities include sponsorship of Team Columbia-HTC in the
Tour de France competition; launch of the YOU campaign in all major mar-
kets; and sponsorship of the Wallpaper Annual Design Awards. Consumer
awareness of HTC and its brand value have, as a result, risen considerably.
We will continue to invest in building HTC brand value and in strengthen-
ing overall brand management.
>A Totally New User Experience: HTC Experience
HTC made its global announcement in London of HTC Sense, an intu-
itive and seamless experience that will be introduced across a portfolio
of phones beginning with the HTC Hero. Apart from a distinctive new
look, HTC Hero packs a powerful suite of features accessible through
the new interface. HTC Hero sets a new high bar for smart phones.
HTC Sense is focused on putting people at the centre by making your
phone work in a more simple and natural way. This experience
revolves around three basic principles: "Make It Mine", "Stay Close"
and "Discover the Unexpected". In addition to observing and recording
consumer habits and preferences as well as listening to their expecta-
tions and needs, HTC conducted an extensive series of consumer
interviews designed to define and distill user needs in order to incor-
porate such onboard applications and services.
> HTC's New Customer-Centered Brand Position– "Quietly Brilliant"
The "Quietly Brilliant" branding strategy is inspired and sustained by a
corporate culture dedicated to satisfying consumer needs and to con-
sistent breakthrough and innovation. HTC is working quietly to create
products that are simply "brilliant". Grounded in an idea and delivering
an exceptional user experience, we let our mobile telecommunications
products speak for themselves. The "Quietly Brilliant" campaign has
been promoted throughout the HTC organization and is today a solid
cornerstone of our corporate culture.
HTC launched its first global advertising campaign-YOU campaign in
October 2009 to define and promote its new brand position. The YOU
campaign, rolled out in over 20 countries, is working to strengthen
market awareness of and commitment to the HTC brand as well as to
raise brand visibility. HTC brand commitment centers on each and
every of its users (YOU), with the tag line - "You don't need to get a
phone. You need a phone that gets you", which underscores HTC cor-
porate commitment to the individual user and promise to continue
delivering mobile phone products that satisfy consumer needs and
fit seamlessly into the way people work and live.
The Future
The founding vision of HTC was to revolutionize the lives of people
worldwide with its converged mobile devices. The turbulence of 2009
has tilted the competitive landscape further in favor of the smart phone
sector, growth prospects for which have not only rebounded, but
strengthened steadily relative to competing products and solutions.
Sectoral strength is attracting greater competitor attention and invest-
ment. In facing this increasingly competitive environment, HTC is con-
fident that its well-leveraged strengths in innovation and consumer-
centered brand commitment will lead the corporation to continued
growth and business success.
HTC will, by listening and observing carefully, continue to make its
mobile phones fit ever more closely into the way people work, play
and live. The user lies at the heart of all HTC's product design and
development work. Our ideal is to make every one of our phones a
"perfect fit" for each of our users - a differentiated objective sure to
instill consumer trust in and identification with the HTC brand. We will
continue to enhance the management and promotion of HTC brand
value and sharpen product differentiation and innovation in order to
provide consumers with an increasingly convenient and intuitive
mobile experience. In building an exceptional reputation for the HTC
brand, we are expanding and deepening our abilities to share the fruits
of our accomplishments with HTC shareholders, customers and
employees.
HTC Corporation
Chairman Cher Wang
CEO & President Peter Chou
LETTER TO SHAREHOLDERS