Keep the faith

Cher Wang is not the sort of person that’s easy to overlook. For a start, she is Taiwan’s richest woman, according to Forbes’ 2015 ranking. She also stands out as one of the rare women in the male-dominated Taiwanese tech industry.

But the chairwoman and chief executive of handset maker HTC is notoriously camera-shy. She doesn’t give a lot of interviews unless it is to talk about business strategy. However, those who know her well say there is another personal topic that will get her to speak more freely: religion.

A devout Christian, Wang often talks about how important her faith is in her life. Even though she comes from a successful tycoon background – her father was the late Wang Yung-Ching who founded Taiwan’s leading petrochemicals conglomerate Formosa Plastics Group and was dubbed the “god of management” for his business acumen – she says her strong work ethic is inspired by the Bible. “Jesus also tells us you have to work hard, not be sluggish,” she once told the New York Times in an interview in 2008.

According to another interview with Tencent Technology, it is not uncommon to see Wang lead a group of senior executives in prayer sessions before reaching critical decisions. The 57 year-old often carries copies of the Bible with her to distribute to those who might be interested.

Given her faith, it is not surprising that she and her husband Chen Wen-chi (also a Christian) give generously to their church. The San Jose Mercury News revealed that the couple have been major donors to the Home of Christ Christian Church in Saratoga since 1996, donating millions of dollars. The California-based church is said to hold great sentimental value for Wang because that’s where she and her husband were married and where Chen got baptised.

But Wang’s faith has also exposed her to a fraudster. It was recently reported that she had been swindled out of millions of dollars by a trusted fellow churchgoer. According to Phoenix Net, Jonathan Chang, a church elder at the Home of Christ Christian Church and a college classmate of Chen, hatched an elaborate scheme to scam the couple of donations that he claimed were for the church’s new multi-million-dollar building project.

In the indictment, it’s claimed Wang provided a $2 million donation and a $3 million loan. However, Chang, who managed the finances of the church, did not disclose the existence of the funds to others in the church hierarchy. Instead, he and his wife directed the money to accounts under their control. In total, it’s believed that Wang and her husband were swindled out of more than $7 million. At the moment, the Changs are out on bail on a $200,000 bond. But if convicted of the various charges of fraud and money laundering, they could face a maximum of 20 years in prison and several hundred thousand dollars in fines.

Religion aside, Wang has other more earthly concerns. It is hardly news that HTC has been struggling as of late. At its peak in 2011, it controlled over 10% of the global smartphone market. Today, its share has dwindled to less than 2%.

So what happened? HTC initially targeted the high-end of the market, which is now dominated by Apple and Samsung. It then tried to launch a lower-end range called Desire to compete against Chinese producers like Xiaomi and Huawei but it never caught on. “I think the problem was competition – Apple, Xiaomi, these companies spend tonnes of money on communications and marketing, they pump a huge amount of investment into the market,” she told the UK newspaper The Daily Telegraph. “There are a lot of Chinese competitors.”

HTC announced grand ambitions for the mainland Chinese market back in 2012 – Wang had set a target to reach a 20% share of the country’s high-end smartphone sales – but it has made only modest inroads. Its biggest problem was positioning: HTC’s smartphones simply failed to appeal to brand conscious Chinese consumers.

Last August, having seen its share price plummet more than 90% since 2011, HTC was deemed virtually worthless as its market capitalisation had fallen below the value of its cash on hand of $1.4 billion. In the fourth quarter of last year, it posted revenue of $766 million, which was a 20% improvement compared to the third quarter. However, it continued to bleed cash, reporting a net loss of $101 million after a loss of $139 million in the third quarter.

Another pressing concern for Wang: HTC may have to fend off unwanted suitors. Speculation of a private equity takeover or an acquisition grew when the CFO of Taiwanese laptop-maker Asustek claimed last June it had “not ruled out the possibility of buying HTC”. (Wang, however, remains unfazed: “I’m a Christian so I’m optimistic and a bit naïve,” she tells Tencent Technology.)

But clearly Wang also concluded something had to change. In an effort to turn HTC around, she took over the role of chief executive from co-founder Peter Chou (and kept her position as chairwoman) last March, so that she could be more involved with its daily operations.

Still, don’t bet against her just yet. Wang founded HTC – which stands for High Tech Computer – in 1997. Originally a contract manufacturer of notebook computers and personal digital assistants (remember Palm?), HTC quickly established a reputation for excellent engineering, winning contracts from Compaq and Hewlett-Packard.

But unlike rival contract manufacturers Wang soon revealed she wanted to create a brand of her own to capture more of the profit.

In 2006, her company started selling phones under the HTC brand, and made its name designing higher-tech models.

For example, it released the HTC Touch, a touch-screen device in 2007, around the same time as Apple’s first iPhone. It was also one of the first handset makers to use Google’s Android operating system. At its peak in 2011, HTC was the leading vendor of Android-based devices and was so successful the company was hailed as one of Taiwan’s most iconic firms.

Wang’s own career path – which has been marked by an adaptive and flexible approach – is perhaps also reflected in HTC’s DNA. In an interview with China Entrepreneur back in 2011, the businesswoman said her dream when growing up was to become a concert pianist. To that end, she was accepted as a music major at the University of California, Berkeley. But three weeks into the programme, she dramatically switched to economics.

Recalling her experience she said: “I took such a long time to write one verse [in the composition class] while others could pound out a song in no time. A good composer has to be hardworking and also talented. But I don’t have much talent. It’s just not realistic to believe I was going to be one of the top musicians in the world.”

HTC is now betting that virtual reality is the new frontier. The company recently released the Vive headset, built in partnership with renowned gaming company Valve. The device, which will ship in April, is believed to be a pioneer in the virtual reality field because it includes full-room position sensing. And given HTC’s mobile background, the headset will also be able to make and receive calls and texts.

So far, reviews for Vive have been promising. Many say the product is strong enough to challenge the highly anticipated virtual reality device from Oculus, the Rift (Oculus is owned by Facebook). Nevertheless, it is hard to predict whether Vive is going to be the saving grace for HTC given the youth of the VR industry and the uncertainties as to whether it will prove profitable.

Wang, of course, is calm: “The Bible says forget what lies behind, focus on what’s in front and run towards the goal. Regardless of small successes or small failures and challenges that we experience today, everything is not going to stay the same tomorrow.”

---

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.