The case describes how HTC, a pioneer in mobile computing from Taiwan, evolved from a local subcontractor of personal data assistants (PDAs) to a global player in smartphones. It analyzes the successful transition of the company from an anonymous supplier of Western clients (such as HP and Palm) to a brand marketer that is considered a major threat to Apple Computer. The key issue in this case is the introduction of the HTC brand in products delivered to network operators worldwide, such as AT&T, British Telecom, NTT DoCoMo, Rogers, Verizon, and Vodafone. Unlike most subcontractors in Asia that encountered strong resistance or even harsh retaliation from their current clients, HTC had the support of many Western buyers in the introduction of its own brand name. This case identifies the structural issues between a subcontractor and a client that can potentially dictate the branding status of the final product sold to end-users — specifically, when a subcontractor should remain anonymous to end-users and when it should appeal to end-users by branding its own product.
Learning Objective:
The case can be used in courses such as marketing management (branding strategy), international business (foreign entry mode), and strategic management (inter-firm collaboration). It has four major learning objectives:
• To analyze the relationship between a contract manufacturer and a product marketer in an outsourcing arrangement called original design manufacturing (ODM), where the subcontractor designs and manufactures a product sold under the brand name of the marketer.
• To compare two ODM setups where the brand marketer sells either the outsourced product alone (e.g. HP resells an outsourced PDA to end-users) or as a bundle with its own services (e.g. AT&T bundles an outsourced smartphone with its mobile services).
• To explore the role of branding in facilitating