HTC Cuts Ties with i-mate and O2

[Darius Wey]

<div class='os_post_top_link'><a href='http://www.cnet.com.au/pdas/pdas/0,239035588,339271166,00.htm' target='_blank'>http://www.cnet.com.au/pdas/pdas/0,...39271166,00.htm</a><br /><br /></div><i>"Until now, HTC has designed and manufactured mobile devices for a range of manufacturers -- including Dopod, O2, i-mate and HP -- but hasn't sold directly to consumers. However, a spokesperson for HTC today confirmed that the company would market smartphone devices in Europe under the HTC brand name. Also re-affirming HTC's consumer push, the Dopod buyout would put HTC in direct competition with its aforementioned customers, potentially leading to HTC designs being sold exclusively under the Dopod branding outside Europe. According to Prim Krithivasan, Director of Dopod's Regional Operator Division in ANZ &amp; India, HTC has cut its ties with both O2 and i-mate. "O2 doesn't have the relationship [with HTC] anymore... [and] going forward the HTC relationship won't extend to i-mate."</i><br /><br />That <a href="http://www.pocketpcthoughts.com/forums/viewtopic.php?t=49093">acquisition of Dopod</a> is just about complete, and behind the scenes, we're seeing new partnerships being created and severed. The quote above says all, and with HTC now selling devices under its own brand, i-mate recently moving to other manufacturers (Inventec and TechFaithWireless), and some new non-HTC devices from O2 Asia being leaked, it's all becoming clear.

[Jason Lee]

Hmm.. i think this is a good thing. Now maybe those of us in the americas will get to see some of those cool devices from asian manufactures that were never before available over here. Now that imate and o2 will be selling them. Plus we can still get the cool htc devices. :)

I think this will really increase our device selection as before we only had 37 versions of the same htc device to choose from. :lol:

[ScottC]

Poor i-mate and O2... They helped HTC get where they are today, and then they just turn around and dump them. Pretty bold move, and one that may come back to haunt them in the future.

[randyzon]

Maybe HTC is big enough that we can have a consumer direct source for new products. I hate having to wait for my (tmo) cell provider to decide to let me be able to buy a product. And, I will emphasize that I hate having to wait for (tmo) to provide updates....the technical support really sucks when it comes to timely modifying the OS so it will work.

[Janak Parekh]

Poor i-mate and O2... They helped HTC get where they are today, and then they just turn around and dump them. Pretty bold move, and one that may come back to haunt them in the future.
Well, you can look at this the opposite way: HTC did this incredibly hard work in designing and building these devices when no one else in the market was doing it, and i-mate and O2 profited by buying them and slapping their logos onto them.

--janak

[ScottC]

Poor i-mate and O2... They helped HTC get where they are today, and then they just turn around and dump them. Pretty bold move, and one that may come back to haunt them in the future.
Well, you can look at this the opposite way: HTC did this incredibly hard work in designing and building these devices when no one else in the market was doing it, and i-mate and O2 profited by buying them and slapping their logos onto them.

--janak

Oh, absolutely. But they also did ZERO marketing in countries like the UK where i-mate, Orange and O2 spent millions promoting their devices. Now the devices are popular they simply turned their backs on them. As I said; the first decent non-HTC devices are coming to the market, and HTC will have to work very hard to stay ahead.

[spacehog]

Here's a little tidbit of information which should shed some light on i-mate current disposition:

Jim Morrison, i-mate's CEO and founder, used to work for BT Telecom where he led a team that designed what would later become the original XDA smartphone (the one with the antenna). When BT pulled the plug on the project due to low existing and projected ROI (boy was that a monumental mistake), Jim took a select group of people with him and went straight to Taiwan on the lookout for an ODM that could manufacture the device based on his blueprints.

He ended up joining forces with HTC who at the time were nothing more than a small office with a leased assembly line from a neighboring ODM. What most people don't know is that in exchange for the blueprints to this highly promising project, HTC agreed to stay out of the Middle-East and Africa for the following 3 years, thus giving i-mate (Carrier Devices) ample time and space to create market share and acquire brand equity in the hottest emerging market without fear of competing "vendors" (i-mate isn't technically a vendor).

I give them full credit for their first year of marketing drives, branding ventures and effective implementation of widescale sales strategies. HOWEVER, if you look at their brand development beyond the first year of operations, they've been COMPLETELY riding HTC's roadmap by simply reboxing, rebranding and marking up (by more than 45% on some products!) firecrackers like the JAM (can you guess where that name came from? here's a hint, Jim's renowned to be untolerably arrogant), PDA2k, JasJar etc.. They're losing on average 1 distributor every quarter and the BlackBerry has taken away a LOT of their SMB business in the past 2 months (10,000 BBs sold in 3 months in Dubai alone!)

i-mate has one of the lowest return customer ratios in the MEA, along with a well-known marketing ineptitude and piss poor after sales support. A little more than a year ago, they went semi-public in the UK with something in the vicinity of 35% of their worth. What have they done with the ~$200m cash grab? Invested in R&amp;D of course (sic) with the i-mate Suite (no comment. go have a look to see what I mean), a bigger office (with more empty glass offices than you can imagine) and a couple of "i-mateicized" hummers that go around Dubai collecting cheques from disgruntled distributors.

Anyhoo, lest you think this was just a rant from an insider with a penchant for i-mate bashing, I'm very anxious to see what will come of the new i-mate without HTC's excalibur, artemis, trinity and herald (don't ask :wink: . They've already made it clear that their intention is to secure exclusivity agreements with a number of ODM's throughout Asia on in-house designed products. This can of course be expected by a company who has no secure market segment, no operator relationships and a very shallow enterprise customer base. If they manage to pull off an upset and keep HTC at bay with some cool new products offerings, props to them and great for us who get access to another 10-15 new smartphone / year.

My prediction: they wait out the mandatory 2 years before cashing out their shares and Jim sets sail for Aruba with his 40 footer (yacht!) and 2 Russian promoters / merchandisers..

[PPCRules]

Maybe this is part of the reason Dell has been so quiet on the PDA front. As I understand, most of their products came direct off the shelf at HTC. There may have been some tension in that relationship as this has been developing, and that has held off at least any public talk of any future products.

Although I suspect the fact that making a profit isn't as easy there as it used to be is the biggest factor, and they are being sidetracked by that irritating distraction.

[AcidAUS]

This has some good information on the fallout for i-mate and O2:

http://www.cnet.com.au/pdas/pdas/0,239035588,339271166,00.htm

[ScottC]

This has some good information on the fallout for i-mate and O2:

http://www.cnet.com.au/pdas/pdas/0,239035588,339271166,00.htm

It does? Looks to me like the same article posted in the beginning of this thread...

[JesterMania]

Poor i-mate and O2... They helped HTC get where they are today, and then they just turn around and dump them. Pretty bold move, and one that may come back to haunt them in the future.
Well, you can look at this the opposite way: HTC did this incredibly hard work in designing and building these devices when no one else in the market was doing it, and i-mate and O2 profited by buying them and slapping their logos onto them.

--janak

Oh, absolutely. But they also did ZERO marketing in countries like the UK where i-mate, Orange and O2 spent millions promoting their devices. Now the devices are popular they simply turned their backs on them. As I said; the first decent non-HTC devices are coming to the market, and HTC will have to work very hard to stay ahead.

From your post, I gather that you're saying i-mate doesn't deserve this because they've spent "millions" promoting while HTC hasn't done any promoting in the past, but the same can be said that HTC spent "millions" in R&amp;D to come up with these devices in the first place whereas people like i-mate just box up and sell these devices. I'm not trying to side with either HTC or i-mate but I find your post slightly biased towards i-mate and I'd like to bring the point up that HTC has probably spent at least the same, if not more...just not in the area of marketing in countries like the UK. Also, HTC may not have participated in marketing to consumers, but they sure need to have done some marketing to resellers such as i-mate, O2, Qtek, and others to get their attention.

I do agree though that by severing these connections, HTC will face more pressure but hey, that's more fun for us consumers. 8)

[Paragon]

I see this as a very positive turn of events for HTC and us the consumer. First, iMate, as has been reported, were doing an absolutely horrendous job with customer supprt. This had to have a negative impact if not dealt with in some way soon. iMate, and O2 were simply another finger in the pie that HTC seems able to do without. For the consumer, this brings us one step closer to the actual manufacturer. This should mean slightly quicker time to market, more competitive pricing, as well, patches and ROM updates should come through quicker now as well, since there is one less step in the time consuming process of ROM updates coming out of Microsoft and filtering through all the different layers. Now it is MS>HTC>end user.

Dave

[ScottC]

Poor i-mate and O2... They helped HTC get where they are today, and then they just turn around and dump them. Pretty bold move, and one that may come back to haunt them in the future.
Well, you can look at this the opposite way: HTC did this incredibly hard work in designing and building these devices when no one else in the market was doing it, and i-mate and O2 profited by buying them and slapping their logos onto them.

--janak

Oh, absolutely. But they also did ZERO marketing in countries like the UK where i-mate, Orange and O2 spent millions promoting their devices. Now the devices are popular they simply turned their backs on them. As I said; the first decent non-HTC devices are coming to the market, and HTC will have to work very hard to stay ahead.

From your post, I gather that you're saying i-mate doesn't deserve this because they've spent "millions" promoting while HTC hasn't done any promoting in the past, but the same can be said that HTC spent "millions" in R&amp;D to come up with these devices in the first place whereas people like i-mate just box up and sell these devices. I'm not trying to side with either HTC or i-mate but I find your post slightly biased towards i-mate and I'd like to bring the point up that HTC has probably spent at least the same, if not more...just not in the area of marketing in countries like the UK. Also, HTC may not have participated in marketing to consumers, but they sure need to have done some marketing to resellers such as i-mate, O2, Qtek, and others to get their attention.

I do agree though that by severing these connections, HTC will face more pressure but hey, that's more fun for us consumers. 8)

Not biased towards i-mate at all, in fact I pretty much hate them as they repeatedly let me down in the support department. Of course HTC spent a lot on development (I wonder how much Microsoft paid them??) but they wouldn't have spent that money if they didn't have firm orders in place from people like O2 and i-mate.

[Paragon]

but they wouldn't have spent that money if they didn't have firm orders in place from people like O2 and i-mate.

If it wasn't iMate and O2 it would have been someone else.

Here's some food for thought....HTC spent good money to buy Dopod and Qtek....but they never saw any value in buying iMate.....rather telling, I think.

Dave

[Nurhisham Hussein]

Here's some food for thought....HTC spent good money to buy Dopod and Qtek....but they never saw any value in buying iMate.....rather telling, I think.

I think it was a case of HTC/Dopod/Qtek having common majority shareholders more than anything else...though you may have a point about iMate not cutting it.

[Paragon]

You're absolutely right about the common ties Nurhisham. Even so I don't think iMate would present much of an interest to HTC or anyone for that matter. :)

Dave

[Phillip Dyson]

Now it is MS>HTC>end user.
Dave

If the VP from HTC America can be believed, for us in the US it will be
MS>HTC>Carrier>end user.

It would appear that they have no intention of bypassing the Carriers in the US. And their level 2 support model will remain.

Thats what I picked up at the Smartphone Summit last week.

[martin_ayton]

I'd be really interested to know just how many unlocked devices are sold outside of carrier/provider contracts. I assume that HTC have done their homework on this and decided that there is enough of a market outside of the carrier/provider rebadged units to make it worth their while. My gut feel though, is that most people / companies are not prepared to spend money on unsubsidised handsets when the carriers offer them a heavily subsidised alternative. I accept all the arguments that an unsubsidised marketplace would be better for consumers, but that is not the marketplace that we have. If HTC cut all their ties with the carriers and rely on direct sales, I suspect they will shift many, many fewer units. I also suspect that there is no way back on this one for HTC - why would O2, or anyone else, ever want to deal with HTC again once they have done the work to foster alternatives?

[Nurhisham Hussein]

I'd be really interested to know just how many unlocked devices are sold outside of carrier/provider contracts.

To be honest, I'd never even heard of locked devices, carrier contracts or subsidies until I came to this forum. And yes, people where I am pay full retail price for phones - smart or otherwise. Because there's no contract involved, device turnover tends to be higher as well.

[ScottC]

but they wouldn't have spent that money if they didn't have firm orders in place from people like O2 and i-mate.

Here's some food for thought....HTC spent good money to buy Dopod and Qtek....but they never saw any value in buying iMate.....rather telling, I think.

Dave

Could be, but it could also simply be that they managed to get a good price for QTek and Dopod and concluded that owning those 2 distributors would eventually kill i-mate. It's all just speculation, but it certainly is interesting when your only source of phones just tells you to go shove it... I'm sure some stuff happened behind closed doors we'll never hear about.

[JesterMania]

I'm sure some stuff happened behind closed doors we'll never hear about.

That was exactly the point I was getting at. There's really no use being pro-HTC or pro-i-mate/O2/etc. because on one side, you can speculate that HTC is playing the role of the bad guy and kicking out O2 and co. after they've helped them gain good market share (telling them "to go shove it" as you put it :lol: ). Or, you can also argue the reverse that O2 and i-mate just couldn't see eye-to-eye with HTC anymore and their contracts fell through. Who knows? Maybe they started demanding more share of the profits from HTC? Maybe HTC thought they were starting to get more influential with their (HTC's) product development than they would have liked? It's like you said:

It's all just speculation...

[martin_ayton]

To be honest, I'd never even heard of locked devices, carrier contracts or subsidies until I came to this forum. And yes, people where I am pay full retail price for phones - smart or otherwise. Because there's no contract involved, device turnover tends to be higher as well.

:oops: My mistake for assuming that the rest of the world is in a similar market situation to the one I'm in. I really ought to know better... Sorry.

[Nurhisham Hussein]

:oops: My mistake for assuming that the rest of the world is in a similar market situation to the one I'm in. I really ought to know better... Sorry.

:wink: No problems!

FWIW, the business model used in the US/UK is pretty prevalent in most advanced economies, but less so in emerging markets. I find it a little strange though, as locking in customers like that can be construed as a monopoly practice, and reduces competition.

[jann]

I'm not a cheapskate, and am happy to pay for quality product - but every XDA I've had has been released buggy, and taken ages to be ROM corrected.

I've had an XDA, an XDA IIs and now an XDA Exec, all from o2
The latter was given to me free because of my call expenditure - and frankly, given the problems even with even the present updated ROM (sluggish performance etc. etc.) I would hesitate to spend $1 on another Exec unit. No exaggeration - it is the most flakey bit of IT kit I own.

The idea that I would spend the Recommended Price of GBP 500 (USD 1000) is laughable. If HTC units are no longer offered subsidised I will simply go to another manufacturer and carrier.

The one good thing I would say is that the build quality of HTC is extremely high.

[kkantchev]

I'm not a cheapskate, and am happy to pay for quality product - but every XDA I've had has been released buggy, and taken ages to be ROM corrected.

I've had an XDA, an XDA IIs and now an XDA Exec, all from o2
The latter was given to me free because of my call expenditure - and frankly, given the problems even with even the present updated ROM (sluggish performance etc. etc.) I would hesitate to spend $1 on another Exec unit. No exaggeration - it is the most flakey bit of IT kit I own.

The idea that I would spend the Recommended Price of GBP 500 (USD 1000) is laughable. If HTC units are no longer offered subsidised I will simply go to another manufacturer and carrier.

The one good thing I would say is that the build quality of HTC is extremely high.

Jann,
It's well known that all HTC based devices are pushing the new innovations to the limit. Most HTC based devices are purchased by people that almost expect to get the bugs you are talking about. In fact if my device is not buggy, I'll be kind of disappointed. Most of the people I know don't relay on their HTC devices to operate perfectly, they just enjoy them the way they are.
It's clear (from your post) that you are not suitable for having HTC device. It's true, they require extensive knowledge to operate and are not suitable for the mainstream customer.

As per the discussion, it's clear that both i-mate and HTC equally contributed for the success of their joint venture. That's why I blame the one that is trying to break it, that’s HTC. It's clear that i-mate can't do it alone, but HTC can.

[jann]

>>It's clear (from your post) that you are not suitable for having HTC device. It's true, they require extensive knowledge to operate and are not suitable for the mainstream customer.&lt;&lt;

- Katchev, you seem to be making incorrect assumptions based on very little evidence - I'm actually a Windows and Exchange Server engineer so your theory fails miserably.

>>all HTC based devices are pushing the new innovations to the limit. &lt;&lt; - the only innovation is the 'size' - you may not have noticed but Bluetooth, Wifi, etc. have now been available for some time.

>>Most of the people I know don't relay on their HTC devices to operate perfectly, they just enjoy them the way they are.&lt;&lt; - well, if you see them as a toy, yes - that must be fun.

If you are in a serious business then you want the HTC unit to work at least 90% of the time - especially if you have paid full price for it. Surgeons use PDAs for example - would you be so relaxed if a heart surgeon approached you with an HTC unit, laughing as it failed mid operation and saying 'well, I'd kind of be disappointed if it worked properly' as you were wheeled into the morgue?

Unfortunately I have not got the time to engage in protracted discussions, but the attitude of you and others like you - that buggy performance by HTC units costing USD1000 is somehow acceptable - is one of the reasons why we are making little progress in this area.

In short, if people like you are happy to throw money away on faulty kit, there is little incentive for HTC to improve reliablity.

What other piece of kit would you expect to be equally buggy? WiFi units that don't connect? Printers that print 50% of the time? DVD Writers that reject 30% of disks?

So why should HTC kit be somehow excepted from the general requirement for kit to... well, WORK?

[kkantchev]

>>It's clear (from your post) that you are not suitable for having HTC device. It's true, they require extensive knowledge to operate and are not suitable for the mainstream customer.&lt;&lt;

- Katchev, you seem to be making incorrect assumptions based on very little evidence - I'm actually a Windows and Exchange Server engineer so your theory fails miserably.

>>all HTC based devices are pushing the new innovations to the limit. &lt;&lt; - the only innovation is the 'size' - you may not have noticed but Bluetooth, Wifi, etc. have now been available for some time.

>>Most of the people I know don't relay on their HTC devices to operate perfectly, they just enjoy them the way they are.&lt;&lt; - well, if you see them as a toy, yes - that must be fun.

If you are in a serious business then you want the HTC unit to work at least 90% of the time - especially if you have paid full price for it. Surgeons use PDAs for example - would you be so relaxed if a heart surgeon approached you with an HTC unit, laughing as it failed mid operation and saying 'well, I'd kind of be disappointed if it worked properly' as you were wheeled into the morgue?

Unfortunately I have not got the time to engage in protracted discussions, but the attitude of you and others like you - that buggy performance by HTC units costing USD1000 is somehow acceptable - is one of the reasons why we are making little progress in this area.

In short, if people like you are happy to throw money away on faulty kit, there is little incentive for HTC to improve reliablity.

What other piece of kit would you expect to be equally buggy? WiFi units that don't connect? Printers that print 50% of the time? DVD Writers that reject 30% of disks?

So why should HTC kit be somehow excepted from the general requirement for kit to... well, WORK?


Well Jann, I agree with everything you said, but that only proves my words that you are not suitable for HTC devices. And yes, I don't use my HTC for serious business. And yes , my i-mate is my toy.
So, are we cool now?