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Hon Hai's 'Bada' eyes Taiwan and HTC's profits
Publication Date : 31-07-2013
Seen as the first movement toward achieving the Bada smartphone platform strategy, Hon Hai and InFocus on Tuesday unveiled two smartphone models amid questions about the possibility of cutting into HTC's profits.
Hon Hai Precision, partnering with InFocus, yesterday launched two upscale models of their new 6.1-inch smartphones in Taipei. Oregon-based InFocus is the largest projector maker in North America, and yesterday's announcement was viewed as its first venture into the smartphone market.
InFocus told United Evening News that its goal is to edge itself toward becoming a top-four smartphone vendor in Taiwan in two years and a top-10 mainland vendor in three years. United Evening News estimated that InFocus will have to ship out upwards of 100 million units to reach this goal.
Hon Hai's Hong Kong-listed unit FIH Mobile is responsible for InFocus's phone design and manufacturing.
Capital Securities analyst Diana Wu told the Wall Street Journal that although Hon Hai is making headway with new customers, the new orders are still too small compared to the volume of iPhones and iPads. It is still a long way before Hon Hai's revenue base thoroughly diversifies, she said.
FIH Mobile has reported losses as major customers continue to lose ground in the fast-growing smartphone market. In a bid to turn its operation around, FIH recently signed on new smartphone customers including Huawei Technonlogy, US TV-maker Vizio, Chinese smartphone vendor Xiaomi, and Chinese TV station Hunan TV, the Wall Street Journal quoted a source as saying.
”Bada” is a Korean word meaning “ocean” and “seashore” and was first proposed in-house nearly a decade ago as a concept, announced as “Samsung Bada” in 2010, a smartphone platform created for a wide range of devices, including not only smartphones but also tablets.
Taking a leaf out of Samsung's book, Hon Hai Precsion has recently been talking about its own version of “Bada” and heaped bags of money in a research and development centre located in Kaohsiung Software Technology Park. Hon Hai has been eyeing out talents, with an aim of hiring up to 3,000 new employees to develop devices and software for Mozilla's Firefox operating system.
Samsung Bada aims to turn its conventional customers into smartphone users by providing cost-effective smartphones with a view to gaining profits in an emerging market. Ironically, with an increasing number of vendors developing “Badas” of their own, there's a general belief that the smartphone market is just a step away from seeing its profits diminish.
The Hon Hai-InFocus alliance yesterday emphasised that high-end smartphone users in Taiwan are their target customers. InFocus smartphones, however, will inevitably induce price wars between all vendors on the island, particularly Taiwan's largest vendor HTC, analyst said.
The InFocus product launch news did not sway the performance of Taiwan's smartphone stocks. At the end of yesterday's session, HTC shares gained 1.48 per cent or NT$2.5 and stood at NT$171, while Hon Hai Precision closed up 0.13 per cent or NT$0.1 at NT$78.7.
US$1 = NT$30