Guest Post: Move Over Nokia and RIM, Here Comes HTC

By Sheena Lee

Taiwan’s HTC (Taipei: 2498) has passed both Nokia (Helsinki: NOK1V) and BlackBerry maker Research In Motion (Toronto: RIM) in terms of market cap, shocking many of us including Wall Street Journal tech guru John Paczkowski who called it “dumbfounding.” (article) As a Taipei journalist who covered HTC from 2006-9, I still remember the first time I visited their slightly run-down headquarters outside [HTC: Taiwan’s new global giant] Taipei. At that time they told me that although unknown to many, they were already the world’s top smartphone maker, and showed me models they made for T-Mobile, Verizon and Orange. Six months later, they started their own brand to improve margins. Many were skeptical due to the recent failure in the cell phone space at that time by another former Taiwan high-flyer, BenQ. Obviously the skeptics were wrong. I am still amazed at HTC’s rapid rise, and spot their ads and phones everywhere in New York where I now live. With the huge growth potential for Google’s (Nasdaq: GOOG) Andriod operating system, which HTC uses, the company seems to have an extremely attractive long-term story. The short-term could be choppier due to supply disruptions and higher memory chip prices caused by the earthquake in Japan. With a 15X PE ratio, versus 12.5X for Nokia, and 8.6X for RIM, the stock may also be slightly pricey.

Bottom line: HTC looks well positioned for the long-term, though could see some choppiness over the shorter horizon.

Editors note: This marks the launch of our first guest posting, which will become a regular feature at YCBB. If you have an idea for a post, please contact us at newsdoug@youngchinabizblog.com.