High Tech Computer Corp (HTC) is looking to strengthen its foothold in Asia by acquiring nine of Dopod International's subsidiaries in the region. The move is expected to happen on July 1.
The acquisition agreement, passed by the Taiwan-based manufacturer's board of directors yesterday, is subject to shareholder approval in June.
HTC had signed a memorandum of understanding (MOU) with Dopod Holding Corp last June to acquire over 50 percent of Dopod's shares as an HTC subsidiary.
Under this new agreement, HTC will acquire the assets of Dopod International's branches in Taiwan, Hong Kong, Singapore, Malaysia, Indonesia, Australia, Thailand, India and the Philippines.
The value of the transfer is estimated to not exceed US$14.5 million. This sum is based on Dopod International's adjusted net worth at the end of the second quarter in 2007 as certified by CPA (Certified Public Accountants).
After the acquisition on July 1, all of HTC's new products will be marketed under the HTC umbrella to project a consistent brand image. Aftersales support will continue to be extended to all existing Dopod devices.
"The comprehensive global marketing strategy will build up real, long-term brand value for HTC and will boost the company's overall competitiveness," said Peter Chou, chief executive officer for HTC, in a press release statement.
While building a brand name from scratch can be a cash-consuming and time-intensive process, Bryan Ma, IDC's director for Asia-Pacific personal systems research, feels that "one thing that will help give HTC a bit of a headstart is the fact that certain gadget geeks, particularly ardent followers of Windows Mobile, will already be familiar with the HTC name".
Ma cited Lenovo as an example that took a few years to establish its brand outside of China, and yet arguably, it is not a household name in every country.
The bigger challenge, he added, will be to get the branding recognized in the mass market. Fortunately, the company already has some scale that it can leverage from its European operations.
A major supplier of Windows Mobile smart phone and PDA devices, HTC has been working closely with telcos across Europe, the US and Japan. Maggie Cheng, chief marketing communication specialist for HTC, declined to comment when CNET Asia asked if the company had any plans to work with any of the three telco operators in Singapore.
As a result of the acquisition, the Dopod C500 and C730 smart phones, announced recently, will mark the last of the handhelds under the Dopod International brand in the region. The entire Dopod International team will also be integrated into HTC come July.
Damian Koh of CNET Asia reported from Singapore.