HTC says no to any potential Asus acquisition

Responding to comments made on Friday by Asustek CEO, Johnny Shih, HTC has made it clear it's not looking for any acquisition deal.
Written by Kevin Tofel, Contributor

HTC made it clear on Monday that it's not interested in selling itself to Asus.

The company posted the following statement on its Investor site in response to comments made last week by Asustek's Chairman, Johnny Shih:

"We strongly deny the news. We didn't contact Asusteck[sic] and will not consider the acquisition. As an international brand, HTC will continue to design world-class innovative smart devices through its pursuit of brilliance brand promise."

HTC, an early darling in the world of Android handsets, has faced hard times in the past several years.

After becoming one of the top-sellers of Android phones in 2011, the company has faced tremendous competition from Samsung, Lenovo, Huawei and other Google hardware partners only to see its sales and profits tumble in recent years.

Apple iPhone sales too have contributed to HTC's woes, particularly in China where Apple is now gaining a strong foothold while HTC says it expects weaker than forecast sales in the near future.

It's a shame HTC couldn't keep its momentum as a leader in the Android space.

The company has made solid handsets but they've falling relatively short in a few areas compared to the competition. HTC, for example, has tried to stand out with its Ultrapixel camera sensor, yet the image quality of other flagship phones is typically better.

Based on my time with the Asus ZenFone 2, which also highlights its camera technology, I'm not certain that a merger would help the company in this area; image quality is also a bit of a let down on the ZenFone 2.

HTC's statement about any Asustek acquisition solidifies what the company has been saying since earlier this year. While it will try to keep innovating in the smartphone market, it will expand to other areas as well, such as connected devices for the home and standalone cameras such as its Re product.

Unfortunately, while it develops new market opportunities, HTC is still getting squeezed out from its main revenue source: Smartphones. And that's only going to reduce any potential purchase price in the future. Perhaps HTC should answer the door if Asustek knocks with a buyout offer.

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