HTC Corp (宏達電), the world’s No. 6 smartphone brand, closed up 2.4 percent at NT$1,080 on the Taiwan Stock Exchange yesterday, following its announcement that it would spend US$10 million to acquire a stake in the fast-growing online music service provider KKBOX Inc.
HTC will purchase an 11.1 percent stake in KKBOX via its recapitalization plan and also take a seat on KKBOX’s board of directors, it said in a statement.
The investment is expected to boost HTC’s presence in the online music space as KKBOX — currently Taiwan’s largest service provider — has plans to move into Japan and other Asian markets.
“Music is one of the fastest growing segments in digital content and it is a key aspect of HTC’s content and services strategy,” chief executive officer Peter Chou (周永明) said in the statement.
HTC and KKBOX have cooperated since early 2004 in line with the smartphone vendor’s move to provide more localized music services and applications to the smartphone users.
“This [new] investment is expected to help fuel additional advances in future devices, especially in the Japan and Chinese-language smartphone markets,” the statement read.
KKBOX chairman Lambert Chien (簡民一) viewed the partnership as a move to enhance the appeal of its music service.
“This will enable KKBOX to further develop its presence in the global smartphone market to become the world’s top online music service provider,” he said.
KKBOX general manager Izero Lee (李明哲) told reporters early this month that the company was gearing up to launch a flat-rate monthly music subscription package in Japan in the third quarter, marking its second overseas foray after Hong Kong.
Lee said that would be Japan’s first such business model, because single-song downloading is the current mainstream model there.
The move comes in the wake of KDDI Corp’s purchase of a 76 percent stake in KKBOX for ￥5 billion (US$60.8 million) in December. KDDI is Japan’s No. 2 telecom services provider.
Other markets that KKBOX is looking into include China, Malaysia and Singapore, but talks on copyright with domestic labels have hit a snag, Lee said.
HTC has recently embarked on a slew of investments to enhance its mobile applications in a bid to compete with such strong contenders as Apple Inc.
HTC’s ￡30 million (US$48 million) acquisition of Saffron Media Group Ltd, which develops software for delivering content over the Internet, and its US$40 million investment in games-on-demand provider OnLive Inc — both announced last month — could help the company attract users to tablet computers and smartphone offerings.
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