HTC Execs Bolt, Sales Slide. Is the End Near for the Company?
What's going on with HTC? A string of executive departures and slow sales for new models are raising questions about the health of this major phone maker.
Last week, Chief Product Officer Kouji Kodera exited the company, the most recent of several other top-level departures. These have included Jason Gordon, the VP of global communications, global retail marketing manager Rebecca Rowland, director of marketing John Starkweather, product strategy manager Eric Lin, and, as of Tuesday, the CEO of the Asia division, Lennard Hoornik. Gordon and Lin went to Microsoft and Starkweather to AT&T.
Lin tweeted earlier this week: "To all my friends still at @HTC -- just quit. leave now. it's tough to do, but you'll be so much happier, I swear."
In addition to the executive departures, the company has faced difficulties for its most visible recent models. The One X last year, the One this year, and the recent First -- the purported Facebook phone unveiled in April -- have been struggling in the market.
According to reports, Facebook's Home interface, a key feature of First, was going to be made available for separate download by the social networking giant only after a delay, giving First time to establish itself. However, Home was made available for download in the Google Play marketplace in the same week as First's launch, undercutting First's uniqueness.
The One, despite good reviews, has been hampered by supply issues with component makers, which delayed it until second quarter and put it in direct competition with Samsung's big release, the Galaxy S 4. According to the Wall Street Journal, HTC co-founder and veteran CEO Peter Chou has told other senior executives that he would step down if the One flops. The Journal reported that an unnamed HTC executive recently said the One has sold about five million units since its release a month ago.
'Jury Is Out'
Since its peak in 2010, HTC's global market share has been reduced by more than 50 percent, largely because of the Samsung/Apple hegemony in dominating the world smartphone market and, recently, by the rise of low-end devices from Chinese manufacturers. According to IDC, HTC is no longer among the top five smartphone makers.
Avi Greengart, an analyst with industry research firm Current Analysis, agreed that HTC "needs the One to sell in volume." He noted that the problem has been "getting the One out of the gate, but it's more generally available now." He also described the First as "a really bad, an embarrassing failure," and said that the executive departures "could be indicative of a problem, but not necessarily."
But, Greengart added, HTC is "basically at breakeven," while a phone maker like Motorola is having its "hundreds of millions of dollars" in losses covered by its deep-pocketed new owner, Google. HTC can't afford many quarters of losses, Greengart said, but "until they show massive losses, the jury is out" on how the company is doing.