HTC case synopsis
HTC Corporation, stands for High Tech Computer Corporation, located in Taiwan, was founded by three members, Cher Wang (chairman), HT Cho (director and chairman), and Peter Chou (President and CEO) in 1997. HTC started as an original designer and equipment manufacturer that designs products such as mobile phones and PDAs (Personal Digital Assistant). However, HTC did not have successful products nor did it build a high reputation until the establishment of its leading position in PDA market by developing a product called iPAQ (pocket PC and personal digital assistant). Since then, HTC became the world’s largest PDA original equipment manufacturer and its largest customers were HP and Dell (PhoneArena Team, 2008).
HTC gradually increased its industry awareness by signing a large number of orders with European telecommunications. In 2002, Microsoft announced a Pocket PCPhone Edition system which drew HTC’s attrition. HTC had the idea of combining the system into mobile phones; it then developed the world’s first PDA phone based on the system. Manufactures such as HP and Dell did not recognize the value of the new product, thus, no order was made. A European telecommunication called O2, however, was highly interested and signed orders. The unique feature of this phone created opportunities for HTC to become popular in Europe, and other European telecommunications started to became HTC’s customers (PhoneArena Team, 2008). In 2009, HTC began to develop its devices based on Android, and one year later, Windows operating systems. In 2011, HTC released its smartphones under its own brand name: HTC. In recent years, due to the pressure of competitive smartphone market, HTC developed a
HTC case synopsis
Touch series phones. This series has a nice appearance, and more importantly, the TouchFLO operating system which is more convenient and smarter than Windows Mobile. HTC has achieved many industry firsts, including the first touch-screen smartphone (2000), the first 3G Microsoft Windows phone (2005), the first 4G smartphone launched in the U.S. (2010) and the first 4G LTE Windows phone (2012) (About HTC). Now, HTC is the world’s top smartphone original equipment manufacturer and the largest manufacturer of Windows Mobile smartphones and it dominates about 80% of Windows Mobile smartphone market share.
The current situation of HTC is quite unfavourable in mobile device market. It suffered a loss of US$101 million for the third quarter of 2013 which is the first ever loss since its public listing in 2002 (Dou, HTC Posts Quarterly Net Loss, 2013). The stock price had dropped about nine-tenth since its peak in 2011 (Dou, HTC Shares Fall to New Low on Weak Revenue, 2013). The October sales are 13% less than last year and the fourth quarter revenue is forecasted one third less than the same quarter last year (Mishkin, 2013).
To make things worse, HTC is also facing a crisis in management. On August 31, 2013, three senior executives were detained by Taiwan authority on suspicion of leaking trading secrets. The departure of some other high level executives due to company’s recent poor performance made the situation more difficult (Dou, HTC Executive Detained Amid Probe, 2013). Now the HTC chief executive has handed his duty to the chairwoman and began to focus on product development because of the heavy criticism for his performance (Bradshaw & Mishkin, 2013).
HTC case synopsis
Apart from the managerial problems, HTC is losing competitive advantage and is pushed aside by its powerful competitors Apple and Samsung. Although the global mobile device market is expanding, the company is losing global market share from 9.3% in 2011 Q1 to 2.5% despite the fact that the flagship model HTC One has become one of the most popular Android smartphones in the world (Dou & Poon, How HTC Lost Its Way With...
References: Bradshaw, T., & Mishkin, S. (2013, October 20). HTC Chief Offloads Duties to Chairwoman to
Cheng, R. (2013, October). HTC at a loss: Where does it go from here?
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Tao, L. (2013, October). The Fading of HTC: A troubled Smartphone Giant.
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