HTC bites the bullet, closes South Korean office

Fighting sluggish sales numbers and competing in a locally-dominated smartphone market, HTC has closed its South Korean office doors.
Written by Charlie Osborne, Contributing Writer

Competing against domestic technology giants including Samsung, Taiwanese phone maker HTC has closed its doors in South Korea.

The smartphone maker has long struggled against low handset sales in the Asian country, and has finally bitten the bullet and closed its South Korea office.


According to an official statement, the move has been made in order to "streamline operations" and improve efficiency across the whole company. "This is a hard decision that has direct impact on people who have contributed to the growth HTC has experienced the past several years," the company said in a statement.

Redundancies were not specifically mentioned by HTC, although it said it has encouraged employees to apply for other open vacancies within the company, according to reports.

An analyst with research firm Canalys, Nicole Peng, told PC World that South Korea remains a difficult market for foreign vendors to break in to and build a strong customer base. According to the analyst, HTC had a 2 percent share of the smartphone market in the country last year, and a 1 percent share in 2012's first quarter.

In comparison, Korean vendors including Samsung, LG and Pantech have secured 90 percent of the market.

"They (HTC) have to invest in the more obvious opportunities in the short term," she told the publication. Instead, perhaps the company should turn its gaze to emerging markets in China, where HTC's lower-end handsets -- the "Kewang" series -- was launched earlier this year.

In June, HTC also closed its main Brazil office, leaving only an after-sales office -- after its smartphone market share dropped to under 1 percent.

HTC's profit margins have taken a beating in recent years, as competition with dominant smartphone market players Samsung and Apple has taken on a new intensity. Despite the positive reception of the newly-released HTC One series, it is unlikely to rival the Samsung Galaxy S III in sales figures.

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