HTC is in trouble. The Taiwanese smartphone maker, once one of the strongest contenders in the Android space, has suffered a string of poor results, been canned by a number of partners and now hit with scandal after three of its designers were arrested in Taipei.
The company has been losing market share for a number of years, and this year it pinned its hopes on the performance of the HTC One, its new ‘flagship’ smartphone. The device was launched in February 2013, but second quarter results were disappointing. Profits were down 83% year-on-year and the company issued a profit warning at the end of July.
Considering the HTC One was voted the best smartphone in the world by both Techradar and Techadvisor this year, it’s quite the fall from grace.
HTC was once the largest manufacturer Android phones in the world. Back in the glory days, circa 2009 - 2011, it played a huge part in popularising Google's Android platform and rose from relative obscurity to pose a credible threat to the likes of Nokia, BlackBerry manufacturer RIM and Apple. But pressure from rival Android maker Samsung has squeezed the Taiwanese maker out of the picture.
HTC also faced embarrassment earlier this year when its HTC First, or ‘Facebook phone’ , was discontinued because of poor sales. It was also ditched by Dr Dre’s headphone company Beats, which bought out HTC’s stake and ended their partnership.
The latest part of the unfortunate decline came on Friday when three of its top designers were arrested on charges of fraud and selling industry secrets. The three were allegedly planning to jump ship after their half-yearly bonuses came through, to start their own design company.
One of the reasons given for HTC’s decline was its inability to keep up with the mighty marketing efforts of Samsung. Since Samsung entered the smartphone arena with its Galaxy handset it has pretty much dominated the Android market, becoming the world's largest smartphone maker - ahead of even the mighty Apple - in July.
As if in an answer to this criticism, HTC has splashed out $1bn on a marketing campaign starring Robert Downey Jr. Whether this can pull HTC out of the doldrums remains to be seen, but the pundits are already betting against its effectiveness.
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