HTC may have to rethink their branding strategy ‘Quietly Brilliant.’Despite the HTC One being one of the best phones around alongside the Samsung Galaxy S3 and the iPhone, the Taiwanese phone maker is struggling with up to 1000 staff laid off this month.
Earlier this week the Company sold down their shares in headphone maker, Dr. Dre’s Beats Electronics, and now they have moved to close down their R&D operations in the USA.
Despite “rave” reviews from various media publications around the world including SmartHouse in Australia, HTC, a firm favourite of Telstra, has failed to hit their sales targets for the new smartphone.
Now HTC has moved to slash its global workforce by shutting down their R&D teams; some members of the R&D team have already been laid-off and there will be no renewals of contracts for 600 workers.
HTC’s problems started shortly after Apple took the Company to Court in 2011 claiming patent infringements.
Sales and profits began to fall in the second-half of 2011.
On Sunday, we revealed the Taiwanese phone manufacturer had moved to sell back half of the 50.1% stake it holds in headphone maker, Dr. Dre’s Beats Electronics less than a year after making the investment.
HTC has retained a 25.1% stake in the company.
The deal was supposed to boost its brand image against staunch competition from Samsung and Apple said the Wall Street Journal, while also enhancing HTC’s sound technology as a selling point to customers.
Investment Group Nomura thinks the sudden change in the relationship suggests the relationship did not quite work out for HTC. For a start, the headphones didn’t really help sell the phones. HTC’s U.S. product executive Martin Fichter told the press in April that “an accessory like headphones doesn’t factor in when someone is buying a smartphone.”
Neither the headphones, nor HTC’s “outstanding” camera, has helped curtail its steep slide in market share against the competition in the last few quarters, writes Nomura.
HTC described the stake sale as a “realignment” that would provide Beats with “operational flexibility for global expansion.” Nomura reads into that statement and thinks there were cultural differences between the two from the start, posing difficulties for integration.
Several analysts believe that there are chronic problems with the way HTC has expanded via investment and acquisition.
In Australia the Company has had a chequered past. Back in 2008, the entire Australian management team of HTC quit with the former managing director John Featherstone slamming the Company as being “Not the place for him”. At the time Featherstone told ChannelNews “The Company is applying Taiwanese marketing practises that will not work in Australia. I believe they want the Company to be completely Taiwanese run”.
Featherstone is now the head of Sony’s Communication operations in Australia .
Ben Hodgson, the current HTC General Manager, is not returning calls. Hodgson who came from Brightstar has refused to talk about HTC’s operations in Australia, instead opting to only talk at orchestrated press events. ChannelNews understands that Telstra is reassessing their range of HTC phones which have been highly successful for the carrier as they deliver higher margins than what Apple or Samsung for the carrier.
In coming months, HTC, who has invested heavily in the Android platform, is set to roll out new Windows 8 based phones. The Company were at one stage the biggest manufacturer of Windows based phones and is now banking on the Microsoft platform to help them turn around their problems.
According to research firm Strategy Analytics, the new Microsoft Windows Phone operating system will capture a 4.1 percent share of the US 123 million smartphone markets. Globally Microsoft is set to grab 3.5%.
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p >HTC and Samsung have some of the biggest Microsoft smartphone portfolios with both companies set to take on Nokia whose success is heavily wrapped around the launch of Windows 8 smartphones.
