HTC Studying Whether to Have Own Smartphone Software Tweet

HTC Corp., Taiwan’s largest mobile- phone maker, is studying whether to equip phones with its own operating system, a move that may intensify competition with Google Inc. and Microsoft Corp.

“We continue to assess, but that requires a few conditions to justify” having our own system, Cheng Hui-ming, chief financial officer of the Taoyuan, Taiwan-based company, said in a phone interview today.

HTC’s own operating system would enable the company, which designs and produces phones using Google and Microsoft software, to reduce its reliance on outside developers. HTC is among possible bidders for Palm Inc., three people familiar with the situation said this month.

“If you look at the successful smartphone players, like Apple and Research in Motion, a reason for their success is that they have their own platform,” said Steven Tseng, who rates HTC “buy” at RBS Asia Ltd. in Taipei and favors the company having its own operating system in the long term. “The negative is the amount of resources they’d need to allocate.”

Cheng declined to comment on whether HTC has studied Palm for possible acquisition. HTC has no timeframe for deciding whether to have its own platform, he said.

‘Multiple Factors’

“There are many multiple factors to be considered together, rather than a simple statement as to own or not to own” proprietary software, Cheng said.

HTC declined 1.4 percent to close at NT$389 in Taiwan trading.

Palm is working with Goldman Sachs Group Inc. and Frank Quattrone’s Qatalyst Partners to find a buyer possibly as early as this week, according to the people familiar with the matter. They declined to be identified because a sale hasn’t been announced.

HTC is the world’s largest maker of phones using Microsoft’s Windows Mobile platform and was the first to release a handset based on Google’s Android. This year, it unveiled its low-cost Smart mobile phone based on Qualcomm’s BREW system.

The market share of smartphones using Palm’s WebOS was 0.7 percent in 2009, while handsets using Symbian, Nokia Oyj’s main smartphone software, accounted for 46.9, according to Gartner Inc.

Research In Motion Ltd.’s BlackBerry had 19.9 percent, Apple’s iPhone 14.4 percent and Google’s Android operating system 3.9 percent, according to the February statement from Gartner, of Stamford, Connecticut.

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