After Nokia, BlackBerry, HTC Staring at Bleak Future

DoThe Best
By DoThe Best August 11, 2015 14:05

After Nokia, BlackBerry, HTC Staring at Bleak Future

Taiwanese smartphone maker HTC seems to be following the footsteps of Nokia and BlackBerry, global telecom giants that have now slipped into obscurity.

HTC’s market capitalization fell to $1.5 billion on Monday, below the amount of cash the smartphone maker had at the end of June. In simple terms, it means HTC’s brand, factories and buildings have zero value at the moment.

HTC’s market cap slumped below cash on books tracking the 60 per cent crash in the company’s shares this year.

HTC’s market share in key geographies has fallen into low single-digits because of increasing competition from iPhone maker Apple and Samsung Electronics, which manufacture high-end phones. Meanwhile, HTC’s low-cost offerings have been eclipsed by budget Chinese rivals.

According to Reuters, industry watchers have dismissed HTC as “confused, unoriginal and uncompetitive”.

Last week, HTC reported a second-quarter loss and forecast another loss for the third-quarter; its chief financial officer said the company would cut jobs and discontinue models as part of its strategy to focus on high-end devices to better compete with the likes of Apple Inc. and Samsung Electronics.

Most of HTC’s phones run on the Android software, where the average profit is only 1.2 cents per phone, according to a report in Business Insider.

“HTC runs at a loss, which means that ultimately it costs more for HTC to make a single phone than it can get by selling them. HTC is basically paying people to take its phones right now,” the report said.

HTC is now pinning its hopes on India, where it claims to sell one in five smartphones that are priced between $250 and $400.

DoThe Best
By DoThe Best August 11, 2015 14:05
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