HTC in Emerging Markets

The Taiwanese smartphone company HTC, which had made a name for itself by selling top end smartphones in developed market, is facing tough questions due to ascendance of Apple and Samsung. The company is now being forced to reexamine its strategy of focusing only on premium smartphones, as that market has been effectively taken over by the duopoly of Samsung and Apple.

The company which has been missing revenue estimates for the last few quarters, missed revenue estimate by 5% once again. The company reported ~$2 billion in revenue with a 1% Operating Margin. The company plans to introduce $150-300 smartphones in China and other Asian countries. The company wants to focus on the high growth low to mid end smartphone segment. HTC which still makes awesome smartphones has been beaten hollow by Samsung’s scale and depth of offerings.

HTC does not have the marketing and distribution to effectively compete with the biggies. It has now decided to concentrate on emerging and niche markets like Myanmar. We think the heydays of HTC are now almost over (reminds one of Acer) and unless a miracle takes place, will mostly become a marginal player in the smartphone segment.

HTC is the Taiwanese smartphone company which has seen the fastest growth after Apple has small presence in India like Apple. Its distribution structure is not that strong and it does not have the product lineup to cater to the low and middle segments which are dominated by Samsung and Nokia.

Apple & Samsung over Smartphones

Samsung happens to be one of the biggest suppliers of components such as memory chips for Apple’s gadgets. The company manufactured phones and tablets have always used the free android based operating system provided by tech giant Google, which compete head-on with Apple’s iPhones and iPad tablets. Apart from tablets, smartphone arena is also not left behind by the two rivals. The tension between the firms has grown manifold with the increased penetration of smartphone in the world. Statistics show that Android based Samsung phones are capturing the market at a higher pace than the Apple products. This not only leads apple into an endangered area, but also threatens about its OS being completely washed off the market. Around 40% of the people globally use Android based phones and the android user base has increased manifold as compared to Apple’s iOS.

The fight between the two companies had been brewing for some time and was supposedly a litmus test for Apple’s determination to thwart the progress of Android, an operating system marketed by search engine giant Google Inc.  Samsung which chose Android as its Operating system is now making huge revenues upon which the counter party Apple calculates damages, as Samsung is known to be the world leader for the Android based products.

Read about Mobile Phone Companies in India.

The mobile phone market has changed radically in the last few years with the advent of Apple’s iPhone. The introduction of the Apple smartphone was a major game change in the Technology Industry with the whole existing ecosystem undergoing a fundamental realignment. The once dominant Nokia with a 40% global marketshare of the mobile phone market, has been continuously declining as can be seen in its share price. Despite numerous restructurings, management and strategy changes, nothing seems to work against the onslaught of Apple and Android. HTC, the first Taiwanese company to manage to break through the OEM mold of its fellow companies, is facing the music as well. HTC which had managed to quickly gain marketshare in the smartphone market is following behind Samsung and Apple.

HTC plans cheaper phones for China as revenue sags

Taiwanese smartphone maker HTC Corp will shift its focus more towards emerging markets and offer lower priced phones in China this year as it grapples with slumping revenue in the shadow of Apple’s iPhone and Samsung’s Galaxy series.

HTC gave a disappointing outlook on Monday for first-quarter revenue, saying it would be flat to 17 percent lower than in the previous three months – worse than analysts had forecast – while margins are also seen holding steady or shrinking.