Smartphone trailblazer HTC loses more than market share

A model holds up the HTC Desire 816 at the Mobile World Congress in Barcelona - REUTERS 

Taipei (Reuters): Taiwan’s HTC Corp, a pioneer in early smartphones, was dismissed by industry watchers as confused, unoriginal and uncompetitive as the already battered shares of the smartphone maker sank to levels that preceded even the era of the iPhone.

The nearly 10% slump in HTC’s shares on Monday was their largest ever, spurred by an almost 30% cut in the company’s second-quarter revenue outlook announced on Friday after the market close.

HTC downgraded its outlook due to slower demand for high-end devices powered by Google Inc’s Android operating system and weaker-than-forecast sales in China. That, coupled with a dismal slate of recent monthly sales figures, has made industry watchers increasingly skittish about the fortunes of the smartphone maker.

They blame a lack of product differentiation in an increasingly crowded market, especially in China, the world’s largest smartphone consumer. They say that unlike chief competitors Apple Inc and Xiaomi, HTC is weak in software and services, which can draw consumers into a brand’s overall ecosystem.

“Traditional smartphone makers like HTC think as long as they make the best hardware, they’ll be able to sell well,” said Wanli Wang, an analyst at Taipei-based CIMB Securities. “That’s just not the case anymore.”

Wang estimates HTC’s global market share at less than 2%, a steep fall from the nearly one-in-10 share it commanded at its peak in 2011, when the company’s shares were worth 15 times more than today.

Even in Taiwan, the brand’s home base, HTC sat in third place behind Apple and domestic rival AsusTek Computer Inc as of the end of last year, according to data crunchers IDC.

HTC was founded in 1997. It helped design and manufacture Microsoft-powered smartphones way back in 2002. Five years later, the first-generation iPhone hit the market. Samsung Electronics Co Ltd entered the fray in 2010 with the high-end Galaxy S series.