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Despite building some of the sexiest smartphones this side of Apple, HTC’s hardware and financial challenges have been well documented.

While its future largely rests on its ability to sell against more powerful rivals Samsung and the iPhone maker, the Taiwanese company is taking the fight to another stage and has quietly set up a separate business unit aimed at building software and services for more than just HTC phones. The team, which includes 260 people from across HTC’s offices, is based in Seattle, but includes people in San Francisco and Taipei.

The first product from the group, known as HTC Creative Labs, will hit the market later this week. It’s Zoe, a short video app, based on software of the same name, which HTC has included with its devices over the past couple of years. It will make Zoe available on Android devices like those from rivals Samsung and LG, in addition to those from HTC.

Drew Bamford, the longtime head of HTC’s user interface team, is heading up HTC Creative Labs. Bamford sees the new venture as something of a third act for HTC, which got its start making hardware for Compaq and Palm before shifting in 2006 to build its own brand of phones.

Building a software business won’t be easy. Just look at all the money and resources that Samsung has poured into its software without generating a hit.

The concept behind Zoe is rather straightforward. Users can compile up to 16 video clips and still images, select a theme, and add a music track, and the software creates a highlight-reel video of up to 30 seconds.

HTC has big ambitions for Zoe, envisioning it not just as the tool for creating these short videos, but also as the hub for viewing and sharing the content.

Zoe’s selling point is designed to be the fact that, in addition to helping one person edit clips, it allows users to remix and expand one another’s videos, even adding in new content. It’s a neat idea, but when it comes to creating a social network around mobile content, success stories like Instagram and Vine are few and far between.

With Zoe, HTC is aiming to build an audience before it figures out how to make money from it.

Getting that audience will be tough. Zoe enters a crowded space, filled with apps designed to make better use of the photos and video that people are taking on their phones. And the current beta software has significant limitations, including running only on high-end phones sporting the latest version of Android as well as a rather limited set of editing options. For example, though users can select which stills and video clips they want, they can’t choose the order beyond which clips are first and last.

To help boost interest in Zoe, HTC plans on partnering with people from the music and sports world, though it said it isn’t ready to name names.

Beyond Zoe, Bamford says HTC Creative Labs is working on other software projects, without offering details. Within HTC, he will have to deal with the inherent tension between using software as a differentiator for its own hardware and releasing products broadly.

“I expected there to be a lot more resistance to shipping things that previously were considered HTC experiences,” Bamford said. “Honestly there hasn’t been that much argument.”

But Bamford and his team will have to split their time. The Creative Labs team is also responsible for developing the software and user interfaces that go on HTC’s own devices. That work is shifting, too, Bamford said.

Historically, a lot of work went into making Android itself more consumer friendly.

“Android doesn’t need as much fixing anymore, to be honest,” Bamford said.