Get your facts straight.

I too am somewhat perplexed about HTC’s purchase of Beats Electronics. Maybe they are trying to differentiate their hardware with an excellent audio experience. I wonder what HP thinks of this acquisition, since HP has lately been promoting Beats in their PC’s and laptops.

Samsung has been in the cell phone business longer than HTC and its rise in the 21st century has been equally if not more amazing than HTC’s and has become the Sony of Korea – and by most accounts, surpassing Sony at least in appeal and execution in most categories. Their broad consumer electronics portfolio in HDTV’s, cell phones, computers, as well as appliances (refrigerators, etc.) certainly will keep Samsung in the smartphone business for a long time. I don’t see HTC surpassing Samsung ever. But that doesn’t mean Samsung will crush HTC. Samsung could crush a less nimble Motorola, Nokia, Sony Ericsson, etc. first.

As for China, you of course know that HTC is a Taiwanese company. The China market is currently mostly feature phones and certainly Huawei and ZTE will play a substantial role in their domestic market. But do you really think there is no room for other players. Who do you think will execute better in China? Except for perhaps Samsung due to its brand and broad consumer electronics portfolio, do you really think Nokia, Motorola, LG will out execute HTC in China?

There are 1 million Taiwanese currently working in China right now, and I think HTC will be able to do just fine in the Greater China market. Peter Chou is considered the “Steve Jobs” of Taiwan and HTC attracts the best and brightest of the Taiwanese. (At a recent BBQ, I met a former Microsoft Windows Phone engineer who worked with HTC and was amazed and wondered how the hell HTC did some of the things they did on Windows Phone). Think about how complicated the Chinese market is and which companies will be able to navigate the complicated business and government environment and relationships there.

As for royalty payments – I have to agree that unless other evidence is shown, if there is actually money being exchanged from HTC to Microsoft for actual royalties without any marketing dollars kickback or other compensatory benefits, I would be shocked. I wouldn’t be surprised what HTC pays to Microsoft in licensing fees will be cheaper than having to pay for lawyers or for settling for lawsuits. There’s a mutual beneficial arrangement between Microsoft and HTC, and there is a deep level of trust and respect at the executive level between Steve Ballmer and Peter Chou.

The patent issue for HTC is real. Its acquisition of S3 and the initial favorable ruling by ITC for HTC vs. Apple on this matter is encouraging for HTC, but of course, this whole mobile wireless patent mess is not just specific to HTC. Whether or not HTC can partner with both Google and Microsoft to protect itself will be seen. But just look at this week’s EU injunction of Samsung’s Galaxy Tab in Europe. No one is immune.

The departure of Howard Luke of course is troubling – any time a key executive leaves a company, that is always a concern. We’ll have to see if his departure indeed signified that things at HTC started to go wrong. But I think that is too early to tell. Buying S3 for its patents is confounding? Your hyperlink to the GigaOM blog post makes it seem it made sense. Is this your professional legal Intellectual Property opinion that this acquisition did not make sense?

Usually a stock buyback is an indicator that a company is fairly confident that the company is undervalued.

This blog post seems like something you decided to write just because you didn’t know what exactly to think about the Beat Electronics – which I agree, I’m kind of confused. But I think a lot of your other conclusions are much more speculative, but I guess that is what a blogger is supposed to do – speculate. Thought I’d give my two cents. Maybe my Taiwanese heritage pride is masking any rational thought, but I thought HTC needed to be defended against your post!

They also produce stock phones.

As for your part two of your comment, what I am trying to point out is that they have a lot more competition and it is not going to be as easy for them going forward. I do agree they need to help build an ecosystem but can they? That is much tougher than most think.