HTC clings on, aims to claw back smartphone marketshare

HTC clings on, aims to claw back smartphone marketshare

Summary: Ailing firm HTC wants to regain its position as a global smartphone maker with a place in the top three, Q4 profit notwithstanding.

htc q4 results rally speech peter chou ceo forecast sales

Ailing firm HTC wants to regain its position in the global smartphone marketplace by clawing back marketshare, although a look at the balance sheet may make this dream seem unrealistic.

In an interview with the Wall Street Journal, HTC's CEO Peter Chou admitted that 2012 had been a difficult year as competitors including Apple and Samsung had proved "too strong," but remained optimistic by saying that "2013 will be better."

Whether the worst is over for the firm remains to be seen, but it might not only be shareholders that consider this dubious, but the company's own staff as well. The Taiwanese firm gave its employees a rallying speech in late december, according to the WSJ -- but the "morale boosting" event has not encouraged everyone.

According to the publication, HTC's management team, including Chou, Chairwoman Cher Wang, Chief Financial Officer Chia-lin Chang and Chief Engineering Officer David Chen gave motivational speeches at the event in order to try and pump up several thousand members of HTC staff at the “morale boosting” event in late December.

Chou reportedly told the congregation that "HTC wants to regain its global top 3 position this year," and invited his staff to "shout some slogans." However, an anonymous employee told the publication:

"To be frank, most of us still don't know how HTC can make a comeback this year as the top managers didn't tell us any solid plan or direction."

In other words, rally the troops but keep the details of company recovery a secret. Furthermore, after being impacted by the legal settlement with Apple in November, HTC may not be seen as a competitive force anymore -- something that its Q4 results implies, but is still no doubt embarrassing for a firm that used to be well-respected with sought-after products in the smartphone industry.

"While it was good to end the high-cost legal battle with Apple, I think it is humiliating for HTC in a way. Apple doesn’t think HTC is a viable competitor anymore,“ said another employee to the WSJ.

The Taiwanese firm's profits have slumped in recent years, and the company have recently missed forecasts for its fourth quarter. In 2012, profits continued to slide quarter-on-quarter as HTC reported Q3 profits of $2.39 billion. Year-on-year, the company has seen profits drop 79 percent, and now in Q4, net profit has plunged 91 percent from a year ago as Samsung and Apple continue to wipe the floor with the smartphone marker.

HTC reported unaudited Q4 net profit of T$1 billion ($34.48 million) on Monday, a fall from NT$11.02 billion ($379.5 million) in the fourth quarter of 2011.

Topics: HTC, Mobility, Smartphones

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  • Cher Wang's project at a pivotal point.

    Cher Wang at one point was Taiwan's richest woman and one of the richest people outright in Taiwan. I am sure the fall of HTC has affected that but she still has the VIA venture which is still OEM and ODM based and thats where HTC started. Possibly its time for a major change in the company focus. For example pure play electronics does not seem to go well as we see with RIM and Motorola. LG, Apple and Samsung all are diversified conglomerates that have overall well performing and diverse portfolios.

    What they need to be looking at for a recovery plan is getting out of the pure play Smartphone business model because that is the path to insolvency and bankruptcy. So they need to ask themselves can we avoid the RIM path? Is the IP and R&D asset base of HTC able to create a new innovation model in the next and up and coming technologies such as say tablets or some software/cloud based information management venture because being a pure play hardware technology company is a rough and tumble world.

    Why not remake the whole business so that Via is more closely linked to HTC (or sell off VIA outright to get capital to really go head to head with apple microsoft samsung and google) and free up capital on research to enable more open platforms. I would look at learning from Apple's simplicity of product offerings and focus on two-three main businesses and just 2-3 brand selections for each. Also I think people want reliability, simplicity in operation and movement towards more seamless integration of technologies add to that low price. Apple and Google are succeeding in many notable areas but still drive away people who do not embrace their Corporate Goliath tendencies.

    Move away from the gee whiz crap and towards the discriminating consumer. Consider carefully what Ubuntu and Cannonical is doing and look at more open platforms that focus on enterprise services, cloud computing and innovations that continue to change the definition of office and workplace.

    Cher Wang has some tough decisions to make just as Jobs did in the 90s. Remake your company and risk everything on a model similar to what I put forward above is what may be necessary for HTC's survival in a hypercompetitive technology world. Such a move would not only help get the investment capital needed to supplement her own considerable fortune (and leverage the risk) but it would most likely be effective as well in firing up the troops at HTC.
  • If I were going to get an Android or Windows smartphone,

    I'd be going with HTC over any other brand. I might be an iPhone person, but phones like the One X and 8X have great build quality and feel. Their Android interface is also easier to figure out than Nexus and Galaxy.
  • htc

    After the experience I had with a HTC phone it don't matter what they do it will be a cold day in he'll before I own another HTC phone