The mysterious case of HP and the Taiwanese

Bruce Einhorn

Today's prize for maddeningly uninformative announcement goes to HP. The company's regional office in Singapore on Wednesday morning sent out a press release touting a new partnership with Quanta, the Taiwanese company that for years has been making outsourced PCs for HP. "HP and Quanta Computer, the world's largest notebook computer manufacturer, today announced they have entered into a technology collaboration alliance," the announcement started. Interested in learning more? Sorry. The next sentence: "Due to the competitive nature of the business, no details were disclosed."

Fortunately, the friendly folks at HP in Silicon Valley were willing to disclose some additional info. Christina Schneider, an HP spokesperson, sent me an email saying that "the agreement facilitates the transfer of technology and design techniques between the companies so that both parties benefit from each others' intellectual property for future joint product development and manufacturing." She added that the deal "expands the existing partnership between HP and Quanta, which centers around HP notebook PC manufacturing."

That last sentence, I think, hints at what's really happening. For several years now, Quanta has been trying to diversify its product mix by moving beyond notebook PCs into products like LCD TVs and servers. It's also trying to become a provider of wireless devices. Lately, some people who follow the electronics industry have been writing- both in the Taiwanese press and online - that HP is going to be using Quanta to produce new PDA phones. By far the leading Taiwanese producer of these gadgets and their cousins, the smart phone, is High Tech Computer. HTC is the hottest company in the Taiwan tech world: Sales are profits have been soaring and the stock price is up 24% so far this year and 500% - yes, 500% - over the past 14 months. That sort of dominance isn't something that the Americans like. For notebook PCs, HP and Dell like to spread the contracts around and ensure that no one Taiwanese company grabs the business. By expanding its partnership with Quanta, HP could be building up the company as a counterweight to HTC in the increasingly important smart phone/PDA phone sector.

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