HTC Clings Onto Retail Partnes AsChinese Brands Offer Big Marketing Dollars

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HTC who is now under pressure in the Australian market from Chinese brands Huawei and Alcatel One Touch has decided “enough is enough” after reporting a net loss of A$193 Million.


Effective immediately the Company is not going to give financial guidance after several quarters of losses.

Late last month the Company launched a new mid-market A9 smartphone, however it is not known when it will go on sale in Australia with carriers and retailers now being offered alternatives to the struggling HTC brand.

The new offerings from the likes of Huawei are backed by multimillion dollar marketing campaigns and rebates for carriers, incentives that HTC are struggling to come up with.  

In their latest financial report, it was revealed that revenue was down seven percent quarter-on-quarter and more than 50 percent year-on-year.

Off the back of those consecutive losses, and a dismal year in general, HTC said it will no longer provide financial guidance for its business going forward. Speaking on an analyst call, Chialin Chang – CFO and president of global sales – said the decision was based on “the dynamic nature of this business year” and, he claimed, similar moves from other public companies in Taiwan. He added that HTC wants to avoid “side effects.”

Analysts in Taiwan claim that refusing to give sales targets, which investors and analysts thrive on, is a desperate measure that signals desperate times.

The Company has also moved to lay off an additional 15 percent of staff, cuts have already been made in Australia.

Chang said in the last quarter that the company’s restructuring efforts wouldn’t bear fruit until early 2016, and she reiterated that late last week.

The other problem facing HTC is that the Company is moving into new VR products that will need heavy expenditure on marketing, other new products including
the HTC-Under Armour wearable range have been delayed with the real possibility emerging that the range will never be released by HTC.  

Asian financial analysts are not happy with HTC’s decision to deny access to forecast information. 

“It’s now worse than Hon Hai,” said Daiwa analyst Kylie Huang, comparing it to the Taiwanese contract manufacturer also known as Foxconn that shuns forecasts to avoid leaking secrets of Apple’s iPhone planning.

HTC’s decision to go quiet comes after years of very public struggle to turn around its business. 

The company was once one of the world’s top-selling smartphone brands, its devices lauded by reviewers for their exterior design and build quality.

 But HTC has found it difficult to adapt to the rise of Huawei and other Chinese brands that compete ruthlessly on price while keeping advanced features.
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