It seems that the competition from Samsung and Huawei has adversely impacted the fortunes of Taiwanese smartphone maker, HTC.
Trading on Monday witnessed a fall in HTC’s market price to NT$47 billion ($1.5 billion), which is below the NT$47.2 billion cash it had at the end of June. This is essentially a drop of as much as 9.8% before a late rally signaled investors put no value on the rest of the company.
According to Business Insider, In layman’s terms, that means that if you could theoretically acquire all the shares of HTC, it would cost you less than the cash HTC holds — meaning HTC would effectively be paying you to acquire the entire company. In investors’ terms, it means people think the company is essentially worthless.
Bloomberg Business believes that this fall was as a result of a failed product and marketing strategy in the face of stiffer competition from rivals like Samsung and Huawei. The One, Butterfy and Desire smartphones didn’t do too well in the market which is dominated by other Chinese brands. And there are too many Android brands on the market right now
From the graph above, it clearly shows that there are many brands with increasingly many different devices and it seems that the android makes think the best way to succeed is just to make as many devices as possible
According to the Chief Financial Officer, Chang Chialin, HTC plans to cut costs and focus on the high-end market where profits are higher. Reductions will start in the current period and start to show results by the first quarter.
With a market capitalization of more than NT$900 billion in 2011, HTC was once the best selling brand in the US.
