HTC is in trouble. It’s that simple. The company was flying high just a few years ago when it dominated the smartphone landscape, but HTC has struggled to stay relevant in a time when smartphones have become a commodity. After a few years of dramatic declines in revenue and profits, HTC has managed to stabilize its operations, but the company’s leadership still hasn’t figured out what it needs to do to grow the business again. HTC isn’t projected to make a profit in 2015 and investors don’t seem keen on the idea of holding on to stocks which will likely continue to drop in price.
Yesterday was an excruciating day for HTC as the company’s stock price hit NT$93 (a new all-time low) at the close of the market, lowering HTC’s market capitalization to roughly $2.65 billion (USB). While most consumer’s don’t really care what stock prices for their favorite consumer brands are at, HTC’s low stock price has a massive impact on HTC financial position and its ability to deliver innovative products. A low stock price means that HTC has less power to raise funds by issuing more stock, but it also means that HTC may become an acquisition target for another player in the market. While HTC may not be interested in selling out, a hostile takeover could certainly come into play if the stock price stays low and Cher Wang (Chairwoman of the Board, CEO and majority stock holder) isn’t willing to negotiate. There’s no evidence that any tech company is interested in buying HTC, but Lenovo did buy Motorola from Google early last year for a little more than $2.9 billion, so it’s not unthinkable that another player would see value in purchasing HTC for $3-4 billion.
HTC’s stock price ticked upward to the tune of 1.8% today, raising HTC’s market capitalization to $2.69 billion. Getting HTC’s stock price above NT$100 shouldn’t take much, but HTC does need to rethink its market approach if they want to see a significant bump in the stock price in the second half of the year. The good news is that Cher Wang promised a “hero product” for October while significant improvements to HTC’s 2016 flagship (the HTC One M10).
“I’m optimistic about HTC’s outlook and development. I believe we will have promising prospects if we choose and focus on developing the right products.”
– Cher Wang
HTC is also getting its feet wet in the VR world with the HTC Vive scheduled for a commercial launch for the end of 2015. While the HTC Vive has been hailed as the best VR experience by nearly everyone who has had hands-on time with it, we still don’t know if there will be enough consumer demand for a VR headset to make the HTC Vive and related products a reliable revenue source for HTC.
If you’ve been a loyal HTC fan, it’s undoubtedly been hard to watch what the company has gone through recently. Not counting the camera experience, the HTC One M7, One M8 and One M9 have outclasses the competition on every level. Yes, the design of the HTC One M9 was lackluster, but that’s easy to fix. We’re hoping HTC find a way to pull itself through the remainder of 2015 without suffering huge losses, but they will need something extraordinary in 2016 to really turn things around.
Source: Focus Taiwan
Is it really that hard Nick? Seriously?
A hero product – as Wang calls it – would turn things around very quickly. What is needed then is HTC listening to the market. That camera problem should have been sorted in six months – instead it took between two and three years. They need to stop seeing themselves as making some righteous stand on principle and deliver what the market wants. They do it better than anyone when they make it their focus. The problem is that the easiest things to sort out – screen size, camera quality – have been their biggest issues. They need to act like a business and less like some guys doing what they want to do; they’ve got bigger responsibilities to the shareholders now.
It shouldn’t be, but you have to remember that HTC is a lot different than the other players in the market. While HTC is responsible for the construction of its phones, they do not make any of the critical components inside them. Samsung, LG, Sony and event Huawei have the advantage on that end since they control the supply chain. This allows them to reduce cost (since there’s no internal markup on components) and build components specifically for their devices.
I do agree that HTC needs to let go of a few things and go all out with the HTC One M10. They need to deliver something truly amazing if they want to continue to be a key player in the smartphone market.
So is HTC Source going to post more bogus articles with info from your ‘inside source’ about a redesigned HTC One to generate website hits?
Did it before, might as well do it again.
Interesting case study. Saab, HTC and I am there.
Some people like it a bit rough. Some dont take risk.
Yes, sad. But merge with another Taiwan company like Acer or Asus? Or am I dreaming in fairy tale land? Or just shrink and keep the higher standards.
I don’t take technology advice from financial markets experts and I don’t take financial advice from technology experts. HTC is a business; is an asset to some (especially its CEO) and will either survive or be disposed of as any other business.
The fact that we are fans (or trolls) with respect to its products is irrelevant.
Moreover, USA markets and Asian markets are vastly and fundamentally different. I was a huge Palm fan — it was a great product — which failed to grow and change with the market, and now the brand is gone, along with the products. HTC will either survive and grow as a brand or be swallowed up by another company and continue to manufacture products — or vanish like so many other businesses. There’s no being anything but sanguine.
Texas Instruments built fabulous laptop computers. Once they were sold by Gateway (the “Nomad”). Now they’re manufactured by Acer. Business goes on — brands don’t always survive.
HTC is doomed until they clean house in the executive positions.
Bussiness 101 mistakes by HTC have been made far to many times. Over priced Robert Downey Jr commercial..really? Hiring a Tattoo artist for design ink? Simple failure in understanding global market demographic. HTC had a head start in Phablet market with One Max but lacked the foresight to follow up even though sales were sluggish. Now the Phablet size phone is more the norm then a Phablet. Cher Wang decides M9 is what EU and North American markets wanted doing away with the only piece of tech (Duo Cam) that differentiated HTC from other smartphones. Simple but catastrophic mistakes like these and there are more (Beats)HTC has made. Does not leave much hope for HTC as a company..HTC has now spread themselves to think to do any serious R&D for a comeback device..Doomed
See, a lot of that doesn’t really matter – so long as you hit the key points. The so called “phablet” was a big one. Most consumers knew, despite what the media and “tech experts” were trying to tell us, that the phablet was going to be a dominant force in the market. If HTC had paid any attention at all to the market in the US and EMEA then they’d have known that was what the market wanted. Instead they can the only thing close to that market.
If they bring out a 5.5 inch screen that hits good numbers, a camera (with duo cam), headphones which take advantage of their market leading audio and sell it to the right demographic then the rest is irrelevant. Downey Jr, tattoo artists, alliances with fitness companies – nobody cares. The phone will sell. But miss just one of them (and the demographic is a big one) then all of those aspects suddenly come into play and are just a stick to hit the execs over the head with.
Given what the PR department was rolling out at the end of last year/start of this year it’s hard to comprehend how wrong HTC have got it and the stubborn refusal to listen. It’s almost gotten to the point where you want them to pay dearly cause they’re frustrating us, the consumer, every day.
Listening to what costumers say should be crucial to HTC. We don’t need no innovation in camera or software, it just has to work. Innovation in design is crucial. Just look what apple does. Average specs, average screen, poor battery, simple UI and OS, but they excel in design, camera and reliability. And sell like crazy
HTC’s marketing strategy sucks and that’s all there is to be said. Samsung (and we all are well aware of each company’s budget disparity) advertises options on their phones that EVERY smartphone has, but the average consumer thinks their (Samsung) phones are the only ones to offer these options. This is where HTC fails and Samsung succeeds. Sometimes the simplest option is the best option.