HTC Case Synopsis Essay

Company HISTORY

HTC Corporation - HTC Case Synopsis Essay introduction. bases for High Tech Computer Corporation. located in Taiwan. was founded by three members. Cher Wang ( president ) . HT Cho ( manager and president ) . and Peter Chou ( President and CEO ) in 1997. HTC started as an original interior decorator and equipment maker that designs merchandises such as nomadic phones and PDAs ( Personal Digital Assistant ) . However. HTC did non hold successful merchandises nor did it construct a high repute until the constitution of its prima place in PDA market by developing a merchandise called iPAQ ( pocket Personal computer and personal digital helper ) . Since so. HTC became the world’s largest PDA original equipment maker and its largest clients were HP and Dell ( PhoneArena Team. 2008 ) .

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HTC bit by bit increased its industry consciousness by subscribing a big figure of orders with European telecommunications. In 2002. Microsoft announced a Pocket PCPhone Edition system which drew HTC’s abrasion. HTC had the thought of uniting the system into nomadic phones ; it so developed the world’s foremost PDA phone based on the system. Industries such as HP and Dell did non acknowledge the value of the new merchandise. therefore. no order was made. A European telecommunication called O2. nevertheless. was extremely interested and signed orders. The alone characteristic of this phone created chances for HTC to go popular in Europe. and other European telecommunications started to became HTC’s clients ( PhoneArena Team. 2008 ) . In 2009. HTC began to develop its devices based on Android. and one twelvemonth subsequently. Windows runing systems. In 2011. HTC released its smartphones under its ain trade name name: HTC. In recent old ages. due to the force per unit area of competitory smartphone market. HTC developed a

HTC instance outline

Touch series phones. This series has a nice visual aspect. and more significantly. the TouchFLO operating system which is more convenient and smarter than Windows Mobile. HTC has achieved many industry number ones. 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 maker and the largest maker of Windows Mobile smartphones and it dominates about 80 % of Windows Mobile smartphone market portion.

CURRENT SITUATION

The current state of affairs of HTC is rather unfavorable in nomadic device market. It suffered a loss of US $ 101 million for the 3rd one-fourth of 2013 which is the first of all time loss since its public listing in 2002 ( Dou. HTC Posts Quarterly Net Loss. 2013 ) . The stock monetary value had dropped about nine-tenth since its extremum in 2011 ( Dou. HTC Shares Fall to New Low on Weak Revenue. 2013 ) . The October gross revenues are 13 % less than last twelvemonth and the 4th one-fourth gross is forecasted one tierce less than the same one-fourth last twelvemonth ( Mishkin. 2013 ) .

To do things worse. HTC is besides confronting a crisis in direction. On August 31. 2013. three senior executives were detained by Taiwan authorization on intuition of leaking merchandising secrets. The going of some other high degree executives due to company’s recent hapless public presentation made the state of affairs more hard ( Dou. HTC Executive Detained Amid Probe. 2013 ) . Now the HTC head executive has handed his responsibility to the president and began to concentrate on merchandise development because of the heavy unfavorable judgment for his public presentation ( Bradshaw & A ; Mishkin. 2013 ) .

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Apart from the managerial jobs. HTC is losing competitory advantage and is pushed aside by its powerful rivals Apple and Samsung. Although the planetary nomadic device market is spread outing. the company is losing planetary market portion from 9. 3 % in 2011 Q1 to 2. 5 % despite the fact that the flagship theoretical account HTC One has become one of the most popular Android smartphones in the universe ( Dou & A ; Poon. How HTC Lost Its Way With Smartphones. 2013 ) . Lack of trade name acknowledgment and high terminal entreaty are two chief causes of gross revenues diminution. As shown in Table 1. the planetary smartphone market is dominated by Apple and Samsung whose market portion combined makes up about half of the planetary portion ( Gartner. Inc. . 2013 ) .

These two Table 1:

rivals have really high planetary trade name
acknowledgment among consumers in high terminal
market while the low terminal market is extremely

Retrieved from: hypertext transfer protocol: //www. gartner. com/newsroom/id/2573415

fragmented and shared by many little rivals in emerging markets. How to set up a competitory advantage over its rivals to claw back the doomed market portion remains a pressure concern for HTC.

LANDSCAPE OF SMARTPHONE INDUSTRY

Rapid Growth

Harmonizing to Gartner’s imperativeness release. worldwide smartphone gross revenues have increased by 47 % in the 4th one-fourth ( Q4 ) of 2011 compared to the same one-fourth in 2010. And the entire smartphone gross revenues in 2011 accounted for 31 % of all nomadic devices gross revenues ( Gartner. 2012 ) . Furthermore. the informations released by International Data Corporation indicates that worldwide smartphone cargos have exceeded those of traditional phones by 2 % in the first one-fourth of Group_A

Some analysts predict that by 2019. over 60 % Figure 1:

mobile phone cargos will be accounted for by smartphone
( Walkman. 2013 ) . This tendency will go on for old ages and is
guaranteed by the demand for multi-functional nomadic device
in both developed and emerging counties. The HTC 2012
Beginning: Gartner. 2012



one-year study points out that China has become one of the top consumers for smartphone with a 40 % growing in Q4 of 2012 ( 2012 HTC Annual Report. 2013 ) .
Regional Penetration Varies

Figure 2: Smartphone user as a
per centum of entire nomadic users

Despite the rapid growing. smartphone incursion
varies across parts. While the incursion rate can be as
high as 50-60 % in Europe and North America. it is merely 10-20 % in some states. Mobile phone market is still dominated by traditional phones. which are featured with low monetary values. in some lupus erythematosus

Beginning: Ogunsanwo. 2012

developed parts ( Ogunsanwo. 2012 ) .
Top Leaders and Operating Systems ( OS )
The competition in the smartphone industry is instead

Figure 3: Net income portion of eight
nomadic phone sellers

intense. Among the nomadic phone sellers showed in Figure 3.
HTC suffered from comparatively low net income portions. particularly in 2011.
Meanwhile. Apple and Samsung together captured over 95 % of

Beginning: Ogunsanwo. 2012

entire net incomes.

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Apple successfully earned 73 % of market net incomes in Q4 of 2011 ( Ogunsanwo. 2012 ) . The distinguishable design advanced with full touch-screen and a web browser that displays complete pages ensured iPhone a important degree of market portion when it is foremost launched. Besides. the userfriendly iOS OS and its associated application shop ( “APP Store” ) secured the bing market portion for future iPhone coevalss.

Samsung is a top participant in both smartphone and characteristic phone industries. It outperformed Nokia and became the largest planetary nomadic maker with 22 % market portion in 2012 ; and it won the first topographic point in the smartphone industry with 32 % market portion. while Apple merely accounted for 12 % . in 2013 ( Gartner. 2013 ) . Besides. Samsung continues to be the most popular smartphone trade name in Asia since 2012. which makes Samsung a powerful rival for HTC’s enlargement to China.

Compared to its rivals. HTC offers clients a pick between Android and Windows OS merchandises with low-cost monetary values. The flexibleness and arresting designs create an chance for HTC to capture the market and unafraid consumer penchant. However. the deficiency of its ain OS incurs considerable menaces when HTC’s spouses change their scheme. For illustration. the Google-Motorola acquisition and Microsoft-Nokia confederation push HTC to the border of being marginalized ( Ogunsanwo. 2012 ) .

Low-End Rivals

Consumer monetary value sensitiveness promotes the growing of low-end smartphone companies. such as ZTE and Huawei. The experiences in exceeding existed engineerings combined with lower monetary values enable the low-end smartphone sellers to gain important market portion. In the 3rd one-fourth of 2013. Huawei and LG Electronics together captured about 10 % of Group_A smartphone market. And the figure is increasing invariably ( Gartner. 2013 ) . The development of low-end smartphone sellers further intensified industrial competition.

STRATEGIC CHALLENGES

Picking an Appropriate Business Level Strategy

HTC needs a more clear. realistic and consistent market placement. It seems attempt to implement an incorporate cost leadership/differentiation scheme. but is “stuck in the middle” . On the one manus. HTC still see high-end smartphone market their strategic focal point in spite the sad fact that their trade name name has been surpassed by that of Apple and Samsung. HTC’s diminishing gross revenues should partly attributed to their unwise selling place ; without holding exceling characteristics and an every bit powerful trade name name. to monetary value their HTC Onemax at a similar monetary value as iPhone 5S and Galaxy Note 3 is really unwise ( Tao. 2013 ) . Obviously. HTC merely does non hold adequate market power to back up such a high pricing.

On the other manus. HTC’s top direction besides lacks a consistent and incorporate program to steer them to vie in lowend market. Although their debut of low-end smartphone HTC Desire C was considered rather successful in Chinese market. HTC does non intent to farther prosecute this cost-leadership scheme at a company-wide degree because they thought their long-run strategic focal point is to keep their image of high quality in high-end market ( Tao. 2013 ) . Now. the low-end smartphone market is dominated by other cost-leader companies with a more aggressive pricing scheme ( e. g. LG. Huanwei. ZTF. and Xiao myocardial infarction ) ( Kelleher. 2013 ) . Failing to keep a strong trade name name in both high-end and low-end market niches. HTC has to re-evaluate its business-level scheme.

Unable to Keep Its Strategic Competitiveness as a Single Business Group_A

HTC’s concern portfolio is excessively little to be competitory compared to its chief rivals ( e. g. Apple & A ; Samsung ) . Both Apple and Samsung have diversified concerns. Except for smartphones. both of them have other flagship merchandises under their ain trade names. HTC does necessitate to diversify its concern portfolio to increase its market power and to cut down gross hazards. For case. in malice of the slow gross revenues in maturating smartphone market. Samsung’s recoil in its bit concern acted as a strong net income driver which contributed a batch to its approximative $ 9. 3 billion net incomes in the 3rd one-fourth of this twelvemonth ( Cheng. 2013 ) . In contrast. being a specializer in smartphone market. HTC has nil else to turn to when its nucleus concern takes a hit ( Cheng. 2013 ) . Furthermore. HTC needs to diversify to derive adequate strategic flexibleness to be able to reapportion its resources internally to accommodate to the extremely completive and rapid altering smartphone market.

For illustration. Samsung’s tactics to cover with intense competitory competition is to throw a big luck into selling and advertisement ( Cheng. 2013 ) . As a individual concern. nevertheless. HTC does non hold adequate fiscal slack. resources and other capablenesss to response to its competitors’ strategic or tactical actions. Debatable Partnerships with Other Companies Could be a Challenge Over the last 12 months. about all intelligence sing HTC’s partnerships were negative. Merely in this September. its long-time spouse Beats Electronics. a manufacturer of audio merchandises and equipment headquartered in Santa Monica. California. decided to stop its partnership with HTC and buyout its investing of $ 265 million ( Reisinger. 2013 ) . Then. HTC foolishly decided to throw important support behind Microsoft. Compared to its Android phones. HTC’s existent strength is come from its Windows phones. which are co-developed with Microsoft. Ironically. nevertheless. HTC put its focal point more on its higher priced Android phones ( Pope. 2013 ) . Merely in this Group_A

September. defeated Microsoft decided to get Nokia’s devices and services concerns ; after this acquisition. 80 % of current Windows phones’ gross revenues will in manus of Nokia ( Pope. 2013 ) . It is clearly that a Microsoft-owned Nokia would easy rule the Windows phone ecosystem. merely like Samsung dose with Android phones. In add-on to Google-owned Motorola and Apple’s flagship iPhones. by giving up to farther develop a closer partnership with Microsoft. HTC truly puts itself in danger. Followed up by the hapless determination to spouse with Facebook. HTC wasted its valuable and scarce resources by puting “unworthy” undertakings.

HTC chose Facebook to co-develop Facebook phone called HTC Frist. However. the gross revenues are manner below what HTC expected because many smartphone users think HTC First is non advanced plenty in that it does non hold adequate interesting and utile characteristics to excel IPhone and Samsung’s Galaxy phones ( Cheng. 2013 ) . Obviously. HTC needs to heighten its ability and strategic penetration to measure and develop strategic confederations with related companies.

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Mentions
About HTC. ( n. d. ) . Company Overview. Retrieved from
hypertext transfer protocol: //www. htc. com/www/about/
Bradshaw. T. . & A ; Mishkin. S. ( 2013. October 20 ) . HTC Chief Offloads Duties to Chairwoman to Change by reversal Decline. Retrieved from Financial Times.
Cheng. R. ( 2013. October ) . HTC at a loss: Where does it travel from here? Retrieved from hypertext transfer protocol: //news. cnet. com/8301-1035_3-57606034-94/htc-at-a-loss-wheredoes- it- go-from-here/ Dou. E. ( 2013. August 31 ) . HTC Executive Detained Amid Probe. Retrieved from The Wall Street Journal.



Dou. E. ( 2013. October 4 ) . HTC Posts Quarterly Net Loss. Retrieved from The
Wall Street Journal. Dou. E. ( 2013. September 5 ) . HTC Shares Fall to New Low on Weak Revenue. Retrieved from The Wall Street Journal.

Dou. E. . & A ; Poon. A. ( 2013. June 23 ) . How HTC Lost Its Way With Smartphones. Retrieved from The Wall Street Journal.
Gartner. Inc. ( 2013. August 14 ) . Gartner Says Smartphone Gross saless Grew 46. 5 Percentage in Second One-fourth of 2013 and Exceeded Feature Phone Gross saless for First Time. Retrieved from Gartner. com.
Gartner Says Smartphone Gross saless Accounted for 55 Percentage of Overall Mobile Phone Gross saless in Third Quarter of 2013. ( 2013. November 14 ) . Gartner Inc. Retrieved from hypertext transfer protocol: //www. gartner. com/newsroom/id/2623415

Gartner says worldwide smartphone gross revenues soared in 4th one-fourth of 2011 with 47 per cent Type a

growing. ( 2012. February 15 ) . Gartner Inc. Retrieved from
hypertext transfer protocol: //www. gartner. com/newsroom/id/1924314
Kelleher. K. ( 2013 ) . How much longer can HTC keep on?
Retrieved from hypertext transfer protocol: //tech. luck. cnn. com/2013/10/17/htctroubles/ ? section=money_technology & A ; utm_source=feedburner & A ; utm_medium=feed & A ; u tm_campaign=Feed % 3A+rss % 2Fmoney_technology+ % 28Technology % 29
Mishkin. S. ( 2013. November 5 ) . Just how severely is HTC making? Look no further than its histories collectible. Retrieved from Financial Times.
Ogunsanwo. O. ( 2012 ) . The Changing Competitive Landscape of The smartphone Industry. Massachusetts Institute of Technology. Retrieved from
hypertext transfer protocol: //dspace. Massachusetts Institute of Technology. edu/handle/1721. 1/72854
PhoneArena Team. ( 2008. November 10 ) . History of HTC. Retrieved from hypertext transfer protocol: //www. phonearena. com/news/History-of-HTC_id3255
Pope. T. ( 2013. September ) . Why HTC is the Biggest Loser in Microsoft Nokia Deal. Retrieved from hypertext transfer protocol: //www. gottabemobile. com/2013/09/03/why-htc-is-the-biggestloser-in-micros
oft-nokia-deal/ Reisinger. D. ( 2013. September ) . Beats Electronics jettisons HTC for $ 265 million. Retrieved from hypertext transfer protocol: //news. cnet. com/8301-10797_3-57604946-235/beats-electronicsjettisons-htc-for- $ 265-million/ Smartphones Expected to Turn 32. 7 % in 2013 Fueled By Worsening Monetary values and Strong Emerging Market Demand. Harmonizing to IDC. ( 2013. June 4 ) . International Data Corporation. Retrieved from hypertext transfer protocol: //www. idc. com/getdoc. jsp? containerId=prUS24143513 Group_A








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HTC instance outline
Tao. L. ( 2013. October ) . The Fading of HTC: A troubled Smartphone Giant. Retrieved from hypertext transfer protocol: //news. sina. com. tw/article/20131023/10928455. html Walkman. R. ( 2013. November 12 ) . Global Smartphone Expansion. Retrieved from hypertext transfer protocol: //www. thealistdaily. com/news/ericsson-sees-huge-global-smartphone-expansion/ 2012 HTC Annual Report. ( 2013. May 15 ) . Retrieved from hypertext transfer protocol: //media. corporateir. net/ media_files/IROL/14/148697/2012 % 20HTC_English ( high % 20resolution ) . pdf

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