Companies, People, Ideas
Cher Dividend
Russell Flannery, 01.09.06




At least one of Y.C. Wang's offspring seems to have inherited his genes for creating wealth: Her High Tech Computer is moving the mobiles out the door.

To the list of innovative Taiwanese companies that design and engineer what they make for the world's biggest consumer brands--Barry Lam's Quanta Computer and Terry Gou's Hon Hai Precision, for example--you can add Cher Wang's High Tech Computer. HTC has ridden to a $6 billion market capitalization on the strength of what it puts into mobile phones, such as those from giant Vodafone. The gathering success of the eight-year-old company is bringing new wealth to one of Taiwan's richest families.

Wang is the fourth of five children born to Formosa Plastics patriarch Y.C. Wang by his second wife, Liao Chiao. (Wang has four more children from a third wife.) In scoring big so far, Cher Wang, 47, has come closest among her siblings to rivaling her father's own wealth (see box, p. 46). Likewise, HTC and its ilk at the top of Taiwan's electronics industry have put behind them the idea that the island's plants were all about cloning components. Cher Wang's business mantra: "Don't do what others are already doing."

Clients like Vodafone need functionality on their pricey phones to get customers to trade up for premium services in a saturated cellular market. Wang, the chairman at HTC, trusts her instincts. "I always believed that if I use a gadget, a lot of other people will use it, too," she says in throaty, fluent English. "People don't want to carry around so many things"--a personal data assistant (PDA), plus gizmos for music, phoning, photography and messaging. It's HTC's ability to cram those conveniences onto one phone and create the software allowing them to work together seamlessly that ultimately gives the company an edge over bigger rivals such as Motorola, says Dominic Grant, who follows the company at Macquarie Securities in Taipei.

HTC's handiwork is paying off handsomely. Net income in the first nine months of 2005 climbed 175% from a year earlier to $200 million, on sales that doubled to $1.3 billion. HTC's stock price tripled in 2005, making it one of Asia's best-performing electronics shares of the year. The market cap has vaulted well past better-known Palm ($1.6 billion), which has its own brand (HTC doesn't), and gives Wang and her husband, an HTC director, a stake worth $2 billion.

That's getting in the league of daddy Wang's $3.1 billion. To Wang's credit the petrochemicals and plastics executive has had no role in HTC. The company was founded by her and her husband Wenchi Chen, plus a group of former Digital Equipment engineers she'd met when Digital was a customer of First International Computer, a Taiwan motherboard maker cofounded by one of her siblings and where Wang also got her start in business.

HTC started out manufacturing notebook computers. In 2000 it won a contract to make the iPAQ handheld unit for Compaq; updated models are still on store shelves today.

But the brass ring is interoperability. "We started with what everyone thought was a niche product," Wang says of HTC's early line of PDAs and pocket computers. "Everybody thought the interface wasn't friendly and the screen was small. We always had that vision [to see beyond that]."

That vision? "I'm Christian. The Bible says that if I don't have vision, I will perish. If you have a vision, no matter how difficult things are, everything just becomes a process."

Key to HTC's success so far has been focusing on big telecom operators willing to pay a contract manufacturer for customized products. She says, "That is how we differentiate ourselves" from the likes of Nokia and Motorola, which target global markets with own-brand models that typically don't have as many new bells and whistles as HTC's phones. "It's a very important business model, and nobody has it right now." The client list includes large U.S. and European telecom operators such as Cingular, Verizon, Sprint, T-Mobile and AT&T Wireless.

HTC's 1,000 research engineers, Wang says, have fared well by realizing their own limitations. One key early call: They've worked almost exclusively with Microsoft's operating system for wireless gadgets (rival Symbian is proprietary software created by a Nokia-led group), ensuring good ties with the big software company. Through that partnership, HTC has been first to market with some of Microsoft's newest updates, such as Windows Mobile 5.0 last year, that make its phones attractive to early adaptors who pay top dollar and influence other buyers.

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