Are Things Getting Worse for HTC?


Adding credence to the global slow-down of the high-end smartphone market is news that Taiwan, one of several nations known as a foundry for the high-tech industry, has seen a 21.7% drop in Year-over-Year (YoY) production. This could signal that HTC has an even grimmer outlook than was previously expected.

HTC Corp, formerly High Tech Computer Corporation, was the largest smartphone vendor in the United States during the third quarter of 2011. Further evidence of the global slowdown in high-end smartphones could see a further erosion of their current global position. HTC has already lost their top 5 smartphone vendor status according to Gartner, the world's leading IT research and advisory company.

Blame for HTC Corp's misfortunes has varied and has often been placed at the leadership's doorstep. A drop in Taiwanese production is only the latest in a long list of reasons as to why HTC is struggling to compete in an increasingly crowded smartphone market.


Love/Hate Relationship with Chou

CEO Peter Chou was hailed as HTC's savior and at first this was seemingly the case. Mr. Chou was able to draw up new products on the fly and push them to market. His boldness and meticulous attention to detail helped HTC grow in early 2011.

Facing stiff competition from Samsung in the high and middle tier smartphone market as well as competition from Huawei and ZTE in the bottom tier has changed the game for HTC and Mr. Chou. The strength shown by Mr. Chou in early 2011 now spelled weakness as there was no real long-term strategy and the product range had no real focus.

In stark contrast, and much to the dismay of tech pundits everywhere, Samsung had taken its Galaxy line of smartphones and widened it to such a degree that one could argue that there are as many Galaxy phones as most smartphone manufacturers release in a year.


The HTC Executive Exodus

It was reported that Mr. Chou did not foster an open environment contrary to an internal memo sent out in August 2012. To make matters worse, Mr. Chou openly chastised managers and compartmentalized executives. So much so that at times there would even be multiple teams working on the same project.

This led to an exodus of HTC Corp high-ranking executives, designers and engineers that started shortly after the launch of the critically acclaimed HTC One. Despite announcing that the HTC One had sold 5 million units and that the new flagship device would be the future of HTC, top executives saw the writing on the wall and abandoned ship.

HTC One, Too Little Too Late

Although the HTC One is a peer to the GALAXY S4 and iPhone 5, the line up is mostly catered to the high-end smartphone market during a time when both Samsung and Apple experienced a slowdown in sales. Unless HTC can emulate Samsung and expand their product line up to include middle and bottom tier smartphones as well as seek to broadly distribute their products across wireless carriers on a global scale, HTC may very well be the next tech giant to fall into irrelevance.