Taiwanese smartphone maker HTC has fallen into a state of turmoil as a result of industry shifts and declining sales.
The company’s stock has hit a record low at 94 per cent below its April 2011 record high of NT$1,238.10 per share. Its shares have dropped rapidly, going as far as hitting the maximum daily limit of 9.9% at the Taiwan Exchange, leaving it at NT$83.60 a share.
Back in 2013, HTC reported its first annual loss, and it barely averted a repeat of the same scenario this year, as the company reported its first quarterly rise in turnover since 2011 and a moderate operating profit in January. This was due to some success that it managed to achieve with its mid-range phones.
This Friday, however, HTC announced a revised forecast for its second-quarter revenue, cutting the original projection by over 30 percent. The company cited stiff competition and weak sales in the Chinese market as well as low overall demand for high-end smartphones as the reason behind the cut in its projected earnings.
HTC’s first flagship smartphone for the year, the One M9, was launched in March, when the company’s stock was at NT$136 per share. The phone failed to sustain, let alone reverse, the company’s stock value. Back in 2011, HTC sold one in ten smartphones worldwide and was known for its creative design and high-end, low-cost hardware. The company’s market share is currently less than 2 percent, as a result of which it has been compared to BlackBerry, the floundering Canadian smartphone company that was once in an industry leading position.
Analysts are now predicting share price to drop even further to as low as NT$57. According to them, the primary hurdle faced by the company is the increasingly crowded smartphone market, where survival is no longer dependent on only being able to make good hardware. HTC is apparently working on a new product that would act as a savior for the company, but hardly anything is known on that front. Meanwhile, CEO Cher Wang appears to be quite positive about the company’s outlook.
