Tue, Sep 22, 2015 page14

• Smartphone maker HTC booted off blue-chip index

  MIGHTY HAS FALLEN: Once Taiwan’s No. 1 brand, HTC no longer qualifies for the Taiwan Stock Exchange index.Analysts point to mistakes and market ‘commoditization’

  • AP, TAIPEI
  • • 
    • 
    • 

  The Taiwan Stock Exchange has removed smartphone maker HTC Corp (宏達電) from its index of blue-chip companies, signaling the dramatic decline of a business that was once the nation’s No. 1 brand and dazzled consumers with some of the world’s first Android handsets.

  The exchange removed HTC from its FTSE TWSE Taiwan 50 index yesterday, after the company’s market value fell below the level required for inclusion in the market benchmark. The index lists Taiwan’s 50 biggest companies, which together represent 70 percent of the market’s value.

  It is a humbling comedown for a company that once sold more than one in 10 of phones worldwide, received plaudits for innovation and represented Taiwan’s ambitions to spawn its own globally recognized electronics brands.

  

  A woman speaks on her mobile phone in front of an HTC mobile phone billboard in Taipei, Taiwan, Monday, Sept. 21, 2015. Taiwan`s stock exchange has removed smartphone maker HTC from its index of blue chip companies, signposting the dramatic decline of a business that once ranked as Taiwan`s No. 1 brand and dazzled consumers with some of the world`s first Android handsets.

  Photo: AP

  In the past several years, HTC has struggled because of marketing and supply chain glitches, as well as intense competition from Apple Inc, Samsung Electronics and Chinese makers such as Xiaomi Inc (小米). Last month, it announced a 15 percent cut in its staff of about 15,700 after a second-quarter loss of US$247 million.

  “They made a lot of missteps, but they were also caught in the crosshairs of a shift to commoditization of the market,” said John Brebeck, senior Taipei adviser with Hong Kong investment consultancy Peace Field.

  HTC’s decline began as the number of smartphone vendors surged along with total shipments that reached 1.2 billion units last year, up 28 percent over 2013. Samsung and Apple captured the US through sales contracts with wireless carriers, while local Chinese brands, such as Lenovo (聯想) and Xiaomi, led in China, as HTC was trying to establish a customer base. Its world market share is estimated now at between 3 and 4 percent.

  HTC attributes its losses to slowing use of high-end Android phones, changes in its product lineup and increased competition.

  It will keep working on high-end handsets, along with connected devices and “virtual reality,” the company’s media office said last week.

  “We remain confident that, with the diversification of our product portfolio and our continued investment in innovation, our market share will grow,” it said.

  Analysts say HTC underspent on marketing, perhaps underestimating the impact of the iconic name recognition of Apple and aggressive publicity campaigns by Samsung.
• Most Popular

  • 1

    Taiwan ranked as the cheapest travel destination

  • 2

    Taiwan would benefit from integrated theater: expert

  • 3

    Scott McTominay fires Napoli to top of Serie A

  • 4

    Suppliers to follow TSMC’s US plans but may be years away, Minister says

  • 5

    Fraud fugitive returns to Taiwan after six years on the run