HTC's Dopod deal seen as positive for IPO

Jun 05, 2006

There may be a surge in multi-tasking personal digital assistant phones across Asia, or so there would be if High Tech Computer's plans pan out.

The Taiwanese group designs and manufactures mobile computing devices for original equipment manufacturers and original design manufacturers. It is also the world's biggest maker of mobile phones that operate on Microsoft's Windows Mobile system, and its plans to increase its foothold was unveiled Monday as it announced it would buy a controlling stake in Dopod, also of Taiwan but registered in the Cayman Islands. HTC has had a strategic partnership with Dopod since the company was founded in 2004, but under the latest deal, HTC would be acquiring $150 million worth of shares in the company. Specifically, the company will pay no more than that amount for a 100-percent stake in the company. For instance, if HTC decides to buy 60 percent of total shares in the Dopod, it will not pay more than $90 million for the transaction.

Details of the transaction, however, have not yet been decided, such as whether HTC would be acquiring Dopod through a share swap or for cash, even though they stated that a deal would be in place by the end of this year.

HTC's chief financial officer Clement Lin made clear nonetheless that both companies were eager to pursue a firm business relationship.

"It's a win-win deal...this would allow HTC to have a quick, timely reaction to market demand," Lin said.

HTC has been a handset manufacturer for some of the world's biggest PDA and mobile phone makers, including Texas Instruments, Qualcomm, and Sony. It has also started to focus more on providing models for telecommunications providers such as T-Mobile and NTT DoCoMo, rather than simply providing the content of handsets for established brands such as Nokia and Motorola.

Meanwhile, Dopod has been financially successful from its early days, and last year, it reported record revenue levels of $130 million with profits reaching $80 million.

There is no doubt that HTC has been one of the most successful, and highly-priced stocks, in the Taiwanese market, yet at the same time, investors have often found it difficult to see what exactly has been the relationship between HTC and Dopod. With HTC expected to go ahead with an initial public offering in the near future, the latest bid to increase its shareholding in Dopod will make it easier for financial analysts to understand the exact relationship between the two companies. Both have hitherto denied having any cross-shareholding, even though HTC has been Dopod's sole handset supplier, and Dopod also accounted for about 5 percent of HTC's total revenue.

Copyright 2006 by United Press International

Explore further: Ex-Apple chief plans mobile phone for India

add to favorites email to friend print save as pdf

Related Stories

Recommended for you

Chinese tech giant Alibaba set to make a splash with US IPO

3 hours ago

The largest tech IPO of the year will come from a company that many Americans have never heard of. Alibaba Group - a Chinese e-commerce behemoth - has decided to go public in the U.S. after months of speculation that it would ...

Ex-Apple chief plans mobile phone for India

Apr 19, 2014

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

Apr 19, 2014

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

User comments : 0

More news stories

Growing app industry has developers racing to keep up

Smartphone application developers say they are challenged by the glut of apps as well as the need to update their software to keep up with evolving phone technology, making creative pricing strategies essential to finding ...

Making graphene in your kitchen

Graphene has been touted as a wonder material—the world's thinnest substance, but super-strong. Now scientists say it is so easy to make you could produce some in your kitchen.