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HTC Corp

Company

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Taiwanese company, one of the world's largest suppliers of mobile phones (communicators).

Competitors: Apple, LG, Samsung
Revenue and Net Profit billions

Number of employees
2013 year
8900
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Performance Indicators

2018: Falling of revenue by 2.5 times to NT$23.74 billion

2018 HTC completed with the sales which fell more than by 2.5 times. They made NT$23.74 billion (about $770.8 million) against NT$62.12 billion the previous year. Annual revenues of the company fell short of $1 billion for the first time more than in 10 years.

Without watching strongly sunk sales of HTC it was succeeded to return to profit, having recorded it at the level of $12.02 billion ($390.3 million). In 2017 net losses equaled NT$16.92 billion. By the end of December, 2018 on accounts of the company money in the amount of NT$41.5 billion accumulated.

Financial performance of HTC

The company ceased to open sales of smartphones long ago. Judging by the falling revenue, demand for tubes of HTC continues to fall and remain low. The Taiwan vendor in the financial statement mentions phones little, placing emphasis on devices of virtual reality.

HTC noted surge in demand for the HTC Vive headset in the corporate sector. Besides, in the report it is said that HTC signed delivery contracts of the Hub HTC 5G device which is to the first in own way specialized mobile "smart" 5G hubs with several telecommunication operators. The device allows to use a 5G network on several devices for fast connection, exchange of content, entertainments, etc.

As for smartphones, the company lays great hopes on the blockchain device of Exodus 1 and hopes to involve more partners (developers and participants of the market of cryptocurrencies) in his promotion.

Experiencing difficulties in the market of traditional smartphones because of the high competition, HTC looks for opportunities for business development in the field of the innovative technologies, such as blockchain, 5G, augmented and virtual reality.[1]

By estimates of analysts of TrendForce, in 2018 HTC delivered about 600 thousand VR headsets, and in the 2019th shipments will reach 800 thousand pieces.

To closing of the exchange in Taipei on March 19, 2019 stocks of HTC fell in price almost by 4%.

History

2020: Yves Metr's leaving from a position of the CEO of HTC

At the beginning of September, 2020 it became known of Yves Metr's leaving from a position of the CEO of HTC. The Taiwan smartphone manufacturer and VR devices he headed less than a year. Read more here.

2019: Yves Metr is the new CEO of HTC

On September 17, 2019 Yves Maitre was appointed the new CEO of HTC instead of Cher Wang who headed the company since 2015. Read more here.

2018: HTC dismisses every fourth employee

On July 2, 2018 HTC announced a personnel decrease almost for 25%. The Taiwanese company which can still do nothing with the falling sales does everything possible for the best management of the resources.

According to Reuters with reference to the statement of HTC, the company will dismiss about 1500 people in production division on Taiwan. Considering that by June, 2018 all staff of the company totaled 6450 people, it turns out that without work there will be every fourth employee. It is going to complete personnel cleaning by September.

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HTC announces the plan for optimization of the production organizations on Taiwan. It will promote more effective and flexible management by resources in the future, says the company.
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Reuters notes that dismissals became a part of the broad strategy directed to consolidation of divisions on release of smartphones and devices of virtual reality in one control structure in each region. In 2017 HTC transferred about 2 thousand specialists (generally on development of phones) to Google company that along with new dismissals calls into question the future of the Taiwan vendor, transfers news agency.

Once HTC was included into ten the world's largest smartphone manufacturers, however the company did not sustain the competition from Apple, Samsung and the Chinese players. HTC intends to concentrate attention on development of the advanced solutions using such modern technologies as artificial intelligence, mobile communication of fifth generation of a 5G, augmented and virtual reality (AR/VR), the chairman of the board of directors of HTC Cher Wang on the annual meeting of shareholders which took place on June 26, 2018 said.[2]

Against the background of these problems of HTC it is forced to reduce business and number of staff. In February, 2018 HTC announced dismissal of a part of employees at the American office. According to Digital Trends, then the company was left by about 100 people, including the president of division on release of smartphones and the attached devices Chialin Chiang  (Chialin Chang).

2017

Losses in $580 million

In 2017 revenue of HTC made 62.12 billion Taiwan dollars (about $2.1 billion at the rate of for March 27 of the 2018th) against 78.16 billion Taiwan dollars the previous year. Recession happened because of weak sales of smartphones.

Losses of the company increased – from 10.6 to 16.9 billion Taiwan dollars ($580 million). In 2015 monetary losses were measured by 15.53 billion Taiwan dollars. Thus, in three years losses of the producer exceeded 43 billion Taiwan dollars that corresponds to $1.5 billion if to proceed from currency rate for March 27. The size of losses of HTC in 2017 was twice higher than the capital of the company (8.2 billion Taiwan dollars).

HTC saved up $1.5 billion losses for 3 years

The HTC company experiencing difficulties which once was among world leading manufacturers of smartphones by 2018 considerably cut off release of these devices. In particular, the company refused creation of cheap devices and got rid of division on development of the Google Pixel models. Within business transformation the Taiwan vendor pays more and more attention to developments in the field of virtual reality.

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HTC conducted a strategic research of business for optimization of commands and processes, translates regions under general management better to coordinate businesses in the field of smartphones and virtual reality and also applies the improved control levers all our examination in group, said in the financial statement of HTC.
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The company does not disclose the sales volume of smartphones. According to analysts of IDC, the share of HTC in the world market in 2017 did not reach and 1%. Analysts of TrendForce research company counted that in 2017 HTC supplied less than 10 million smartphones to the market, and foretell that in 2018 the indicator will fall up to 2 million devices. In February, 2018 HTC dismissed the head of telephone division Chialin Chang.[3]

Sale of Google of business on release of the Pixel smartphones

On September 21, 2017 it became known that the HTC company agreed with Google corporation about sale by it of a part of the mobile division of HTC which is responsible for production of the Pixel smartphones. Transaction amount will be $1.1 billion. The companies are going to close the transaction until the end of the end of 2017. Read more here.

HTC stops release of budget smartphones

On February 16, 2017 the HTC company declared failure from release of budget smartphones for benefit of more expensive and profitable devices, at decrease in number of their models.

At the same time the vendor is going to develop the direction of virtual reality.

Production of more expensive models makes big profit, solved HTC and intended to stop release of budget smartphones. The reason of such solution - unsatisfactory financial performance of the last quarter. In 2017 the vendor is going to produce smaller quantity of models of smartphones – no more than six or seven. Two of them are provided earlier - it is U Ultra and[4].

Strategy was announced at a meeting of company management on February 14, 2017.

2016: Recession of sales to $3.3 billion. Loss of $341 million

Net losses of the company for 2016 - $341 million, it is 32% less, than the company lost in 2015. Sales at the end of 2016 fell, having reached $3.35 billion against $4.2 billion in 2015.

The IV quarter of 2016 became for HTC seventh unprofitable quarter in a row. Based on a quarter, from October to December, the company received revenue in the amount of $720 million that is 13% less in comparison with a similar indicator of 2015. Net loss of the company reached $100 million in a quarter. Operating profit - $116.8 million that is 12% less, than a year ago.

2015

Revenue in $4.2 billion

In 2015 revenue of HTC made about $4.2 billion.

HTC cuts down the state and a line of smartphones

On August 7, 2015 stocks of HTC fell to the lowest level for the last 10 years after the Taiwanese company announced the loss, largest in the history, the weak forecast for income for the third quarter and plans for expense optimization.

During the interview to journalists the chief financial officer of HTC Chang Chialin said that the company planned "considerable" reduction of jobs which will concern all departments and geographical divisions. How many employees is going to be dismissed and when, it is not specified.

The weak financial position brought down the quotations of HTC to the lowest level in 10 years

Besides, HTC will cut down the range of smartphones to focus on the bonus models making more for profit.

"We are going to simplify and optimize our portfolio. We pursue profit, but not sales volume", – mister Chialin told, having added that the expense reduction program can last before the first quarter 2016. Parts of restructuring remain confidential.

HTC decided to begin to save in the conditions of financial recession which is endured by the company. In the second quarter 2015 the Taiwan producer recorded a record loss — in 8 billion Taiwan dollars (about $252 million) and also double falling of revenue (to 33 billion Taiwan dollars/1.04 billion $/). The forecast for a loss for the third quarter was five times higher, than expected analytics — 5.51-5.85 Taiwan dollars ($0.17-0.19) against 1.17 Taiwan dollars ($0.04).

Weak financial performance which was called by HTC brought down on August 7, 2015 stocks of the company for 10% (the maximum value of falling in a day at the exchange in Taipei), to 63 Taiwan dollars ($2). So low value of quotation of vendor was not reached since February, 2005, notes the The Financial Times edition.

HTC calls the following sources of the problems: weak sales in China and insufficiently high in comparison with expected demand for smartphones of the high level. By estimates of analysts of Barclays, for the first three months after emergence of a leader of HTC One M9 in the market of delivery of this device were 44% lower in comparison with the predecessor of HTC One M8. The producer does not call quantity of the sold tubes.[5]

2013

Top managers steal information for creation of home company in China

The authorities of Taipei brought charge to the former vice president of HTC for design Thomas Chien and five more former employees of the smartphone manufacturer conducting in Taiwan of theft of a trade secret and commission of other crimes, GigaOM with reference to Wall Street Journal[6] reports[7].

According to the investigation, Chien is involved in transfer of data on design of the new version of a graphic cover of HTC Sense to 6.0 certain partners in Beijing with which it was going to found the new company in China. The cover of HTC Sense is a corporate feature of mobile devices of HTC. Among users it has most an appreciation in comparison with similar developments.

Investigators also claim that Chien got bribes and forged documents on nonexistent funds expenditures of the company in the amount of 33.6 million Taiwan dollars ($1.12 million).

The prosecutor demands severe measure of punishment because of the considerable value of damage which Chien put HTC and also for the reason that the defendant does not regret deeds.

The names of other defendants are not told, however in August was reported that, in addition to Thomas Chien, investigation is made also concerning the head of research and development of HTC Wu Hung and the senior manager of the company Justin Huang.

Ex-employees are expected by court. It was expected that they will receive real prison terms.

Advertizing contract with Robert Downey Jr.

In August, 2013 it became known that HTC signed the two-year advertizing contract with Robert Downey Jr. New advertizing should help smartphone manufacturer to update the image. Besides, the company hopes to improve operational indicators thanks to advertizing: recently sales of HTC fall, the smartphone manufacturer can receive a quarter loss for the first time in 10 years.

Advertizing campaign will become so creative and extravagant how at the moment HTC stable and balanced, notes FT. If the company name, beginning with assembly of computers is initial, was an abbreviation of a phrase high-technology computers, then in a new advertizing campaign different unexpected options of its interpretation are offered.

The first TV-roller begins with the fact that Robert Downey Jr. appears at a meeting of Board of Directors to discuss rebranding of HTC and offers the interpretation of an abbreviation — Humongous Tinfoil Catamaran ("a huge catamaran from a foil") then all appear near a catamaran and begin to photograph it on phone. Further the meeting becomes even more surreal — attendees appear on "car wash of hipsters trolls" (Hipster Troll Carwash), dancing to the sound of music on phone; then — conduct fighting using "a catapult with hot tea" (Hot Tea Catapult). Then the woman transfers Downey Jr. of a cat with the words Hold This Cat. The roller comes to an end with the slogan Here's To Change ("Here to change")[8].

2011

I quarter: plan of growth of deliveries to 157%

In the I quarter 2011 of HTC is going to increase deliveries of devices to 157% in comparison year-on-year to 8.5 million pieces. Revenue is predicted on a mark of 94 billion Taiwan dollars ($3.2 billion) - plus 147% year-on-year.

HTC pays a royalty of Microsoft for Android smartphones

In May, 2011 it became known that HTC will pay Microsoft of a royalty from each released device based on Android. In total Microsoft should receive $150 million that in 5 times more, than it earned from sale of licenses of own mobile platform Windows Phone Android[9].

Within the reached agreements the Taiwan mobile device manufacturer of HTC undertakes to pay Microsoft $5 from each released smartphone on the Android platform, Business Insider with reference to the report of the analyst of Citi Walter Pritchard reports.

For May, 2011 HTC produced about 30 million smartphones on Android. If the company will really pay $5 from each device, Microsoft will gain an additional income in the amount of $150 million. For comparison, by this moment of Microsoft implemented about 2 million licenses for own platform for smartphones, Windows Phone. Taking into account that the cost of one license is equal to $15, income of corporation from sale of all licenses was about $30 today that is 5 times less than the amount which HTC, reported on the website of Asymco analytical company undertakes to pay.

The corresponding licensing agreement of the technologies of Microsoft used in the mobile platform Google Android, the parties concluded in April, 2010. At the same time HTC became the first company which went to world at once, in difference, for example, from Motorola which also releases Android smartphones, however selected a way of fight against Microsoft.

According to Pritchard, in the whole Microsoft requires from the companies which release Android smartphones, for $7.5-12.5 from each device. The analyst believes that with the current victory of Microsoft the situation around Android within the coming months will become more intense - as the patent pool of Google is rather small effectively to be protected.

In April, 2011 Google of the first performed with intention to purchase a patent portfolio of the Canadian producer of telecommunication equipment Nortel Networks which will help to uphold the positions in court. The company offered $900 million for a portfolio, is going to hold an auction in June, 2011.

According to calculations of other analyst of Citi, Kevin Chiang, operating profit of producers from each smartphone on the Android platform is 10-15% while from tablets - is even lower, only 2-3%. Taking into account that Microsoft is not the only company applying for this profit through the patents (Oracle also hunts Google), over time this value can become even lower that will help such companies as Microsoft and Apple.

2010: Growth of revenue by 93%

Revenue of HTC at the end of 2010 grew by 93% to 278.8 billion Taiwan dollars ($9.6 billion) in comparison with 144.5 billion in 2009, profit - for 75% to 39.5 billion Taiwan dollars ($1.4 billion) against 22.6 billion the previous year.

In a regional section:

  • 50.6% of revenue received at the end of 2010 were the share of North America,
  • 32.3% - to Europe
  • 17.1% - to Asia and other regions.

The average holiday cost of the mobile phone in 2010 was 11036 Taiwan dollars ($350) against 11661 ($352) in 2009.

For all 2010 of HTC produced 24.6 million mobile devices that is 111% more in comparison with 2009 (11.7 million). During the period from October to December, 2010 the vendor delivered 9.1 million devices, is 163% more in comparison with the same period of 2009.

The company noted increase in level of brand recognition in 2009-2010 by 4 times up to 50%.

HTC began to show so high growth rates after started release Android-smartphones.

The 4th quarter 2010: The profit of one of leading manufacturers of smartphones, HTC companies, in the 4th quarter 2010 grew by 160% in comparison with the same period of 2009 to 14.59 billion Taiwan dollars ($500 million). It is reported on the official site. Revenue of the company made 104 billion Taiwan dollars ($3.6 billion) in comparison with NT$41.07 billion for the same period the previous year ($1.4 billion).

2006: Start of production of mobile phones

Since June, 2006 - the company creates and releases devices of mobile communication under own trademark of HTC.

Notes