HTC partners well with telcos to incorporate their content services into its phones, said Jeff Pu, an analyst with Taipei-based Fubon Financial Holding. A growing awareness of its brand and good hardware designs should help it stay competitive, he said.

"HTC is establishing long-term differentiators," according to Pu.

In March it spent US$10 million for an 11 percent stake in KKbox, a fast-growing online music service that operates in Taiwan, Hong Kong and Japan, and is eyeing the huge China market.

The Taiwan firm has also been trying to build a unique user experience at HTCSense.com, via investments in Saffron Digital, OnLive and KKbox.

It spent $48.5 million to buy Saffron Digital, which offers encoding, DRM (digital rights management) and other technologies for delivering online video. And it invested $40 million in on-demand games provider OnLive.