“In five years, you’ll look back at what we talked about today and realize that 2007 marked an inflection point in cell phone history, representing a brand new start,” HTC’s baby-faced chief marketing officer John C. Wang tells CommonWealth Magazine with conviction.

The new era Wang referred to began in early June when Taiwan’s HTC launched its “HTC Touch” smartphone in London, two weeks before Apple’s ballyhooed iPhone went on sale.

The HTC Touch and iPhone are both touch-controlled smartphones featuring super thin casings and user-friendly interfaces. Because of the similarities of the two phones, people measured the HTC Touch against the iPhone the moment it was launched.

For both HTC and Apple, introducing smartphones with touch screens has served as a vehicle through which they can build up their brand names. That they decided to bet heavily on the strategy in near-perfect synchrony is nothing short of remarkable and may actually benefit HTC.

“HTC and Apple were like two great minds that think alike. HTC can ride the wave of enthusiasm created by Apple,”says Merrill Lynch Taiwan senior vice president Tony Tseng.

Saying "No" to Keypads

“I think we’re pretty lucky to have a world-class company confirm the direction we’ve chosen,” HTC’s Wang comments.

HTC is rewriting cell phone history by dispensing with the “keypad orientation” of the past two decades and embracing a “touch screen orientation.”

HTC actually made its first touch-screen smartphone in 2002 and has continuously upgraded that model. That effort culminated in the HTC Touch. 

“We have said ‘no’ to keypads. Apple has also said ‘no’ to keypads,” Wang says.

“How did people used cell phones in the past when keypads dominated?” asks Wang, jumping right in with the answer. “Punching the right keys, at the right time, in the right order... And then you found that there were more and more keys on your cell phone, making it more and more difficult to operate.”

The touch-screen operated HTC Touch has only three mechanical keys. The iPhone only has one ?w used to reset the screen to the main page. HTC made it a priority to do away with keypads about two years ago, and put Wang on the task. As the head of the company’s “Magic Lab,” Wang led its “magicians” in creative brainstorming sessions to develop HTC’s revolutionary touch-screen interface.

HTC ’s main focus in designing the new smartphone’s interface was to completely eliminate the barriers and difficulties involved in using a cell phone.

“We discovered that just making it easy to use was still not enough. We had to make it so that users wouldn’t need an instruction manual,” says Wang, describing his team’s thinking in the initial stages of the project. HTC wanted to go beyond the notion of “simplicity” that had taken root in the industry by making “simple even simpler” and relying on users’ intuition and the feel of their fingertips to operate the new devices.

“We imagined how babies would intuitively try to use this cell phone if they had a chance,” Wang says. “If your technology is really good, your technology should be non-existent.”

The new touch-control technology has analysts excited. Many believe that touch screens and smart operating systems will become mainstream cell-phone technologies in the future, because they offer users unlimited opportunities to unleash their imagination and creativity.

Imagination Unlimited

As cell-phone functions and services become more diversified, traditional cell-phone interfaces are less able to deliver total satisfaction. Functions like sending an email message or playing music are cumbersome, because keypads limited to numbers and symbols must be transformed into a computer keyboard or “volume,” “play,” and “pause” functions. Not so with the touch screen.

“The touch screen is a blank panel. There’s unlimited space to let your imagination go, with software that lets you write whatever you want,” says Shan-Tung Wu, analyst in the Institute for Information Industry’s Market Intelligence Center, noting that the smartphone interface allows users to add new functions or new virtual keys at any time.

Smartphones will also more readily accommodate new services launched by telecoms that traditional cell phones have often been unable to support. With their “intelligent” operating platforms, the new devices can quickly create new functions and be tailored to meet differing consumer requirements. Smartphones currently have a 14 percent share of the cell phone market, which International Data Corporation (IDC) estimates will rise to 20 percent by 2008 or 2009. 

There is little apparent difference in the appearance and functions of Apple’s iPhone and the HTC Touch, but the similarities end when one looks at the two devices from the inside. The HTC Touch’s internal design reflects the innovative path taken by the company, butthis innovation has not necessarily been appreciated by the market.

“The general feeling is that iPhone is a cut above the HTC Touch,” Merrill Lynch’s Tseng says.

The iPhone’s more powerful sensors result in a wider range of functions. Its optical sensors can automatically adjust the brightness of the screen depending on changes in ambient light to save power consumption. An accelerometer sensor senses how the device is oriented and rotates the display vertically or horizontally to match its position.

Another significant difference between the two is that iPhone comes equipped with powerful software services and functions, such as Google Maps, Yahoo’s email system, and You Tube. 

The iPhone’s multi-touch screen is also more sensitive and functional, capable of simultaneously responding to the touch of up to two fingertips. If you lightly pinch the corner of the image with your thumb and index finger, it will bring the image closer and bigger. Drag the image out toward a corner of the screen and the image will appear smaller and farther away. In contrast, the HTC Touch resistor-based panel can only sense the touch of one fingertip at a time.

Innovation Comes at a Heavy Price

Yet none of the iPhone advantages can negate the significant innovative breakthrough that HTC’s touch-panel resistor technology represents. Fox Su, a senior researcher at Topology Research Institute,says the big brands have only been able to use resistor technology to recognize and respond to a stylus, not a fingertip. HTC used software-driven resistors to enable users to scroll pages and respond to a finger sweeping across the screen.

“HTC’s touch screen is developing really fast,” Su says.

This innovative breakthrough did not come easily. HTC’s chief operating officer Fred Liu explains that touch-screen interfaces require more than getting the panel right. The challenge, he says, was to overcome the variations in speed and pressure exerted by every individual’s fingertip and the different sizes of the fingers themselves. Some users even use their nails to sweep across the screen, Liu says, but regardless of the nature of the contact, the software must judge it to 99 percent accuracy. 

HTC is known as the world's largest maker of mobile phones that use Microsoft software. But when it came to developing the Touch, HTC went it alone, engineering its own unique TouchFLO technology, which integrate software and hardware for the touch-screen smartphone.

“This time, Microsoft didn’t help us at all,” Wang proudly says. Although the TouchFLO is structured around the Windows operating system, the innovative first level of the touch-sensitive interface makes a striking impression.

The Main Battleground: Europe

The debut of the HTC Touch was also a declaration that the HTC brand had arrived. The company, which has traditionally targeted business customers, is now going after the end consumer.

Beginning last year, HTC offered cell phones with GPS and music functions, drawing it closer to the consumer market, and its in-house development of the TouchFLO system symbolized its attempt to free itself from Microsoft’s commercial grip.

With the HTC Touch backed by this unique technology, analysts believe HTC has a chance to outsell the iPhone in Europe. They say Apple’s supply chain consists primarily of foreign vendors, which may make it difficult for the company to launch the iPhone in Europe by its November target date. Another factor in HTC’s favor is that it has already built close relationships with European telecommunication companies.

“The main battleground for the iPhone and HTC Touch is Europe,” one senior industry analyst contends.

The HTC Touch represents a breakthrough not only for the company, but also for Taiwan. The iPhone has taken the world by storm, but the only device even mentioned in the same breath as Apple’s smartphoneis not made by giants Nokia or Sony-Ericsson, but by Taiwan’s own HTC.

“We can’t compare to Nokia or Samsung in terms of production volume. But when it comes to innovative breakthroughs, everybody will remember Taiwan’s little HTC,” Wang declares.

Although it is still hard to know how well the HTC Touch will sell, HTC’s ability to match the innovation of a world-class company has already won a great amount of respect.

Translated from the Chinese by Luke Sabatier