After the shutdown of the main offices at Brazil and North Carolina in June, Taiwanese smartphone giant HTC gave in to intense competition by native Korean companies and pulled down the shutters at its office in South Korea. The move comes after company’s market share fell to just 1% in the country, with Korean smartphone manufacturers Samsung, Pantech and LG dominating with a total market share of 90%.
According to Nicole Peng, an analyst from Canalys, South Korea has always been a difficult market for smartphone companies from around the world to enter. HTC’s crumbling sales comes as no surprise after the company’s reported market share last year was a mere 2%.
Calling the shutdowns necessary to “streamline operations”, HTC has been struggling to neutralize the profit dips since the last few quarters. In the last quarter, the Taiwanese smartphone manufacturer reportedly suffered a loss of 58% in its earnings. Not having seen any considerable success post HTC Desire’s brilliant run, the company seems to be in a more difficult position because of the ever-rising sales of Samsung and Apple devices, which amount to nearly half of the market shares.
Researchers have come with possible theories behind this upheaval in the market. One of the possible reasons behind HTC’s failure in posing any kind of threat for fellow android device makers – Samsung, can be their vague branding. Despite launching quality devices such as the One series (HTC One X, One S and One V), the marketing of the products has been pretty substandard as compared to the massive publicity runs for Samsung’s flagship device, the Galaxy S III. The new HTC devices, especially the One X and EVO 3D have received a fair amount of critical acclaim. That being said, the word-of-mouth has not proved to be enough for HTC to keep its profit margins high.
On the subject of shutdown of the office in South Korea, Peng commented that HTC needs to invest in opportunities which will ensure sure-shot success in the near future, so as to cope up from the recent losses. Emerging markets like the South-Asian and the African subcontinent can prove to be helpful in boosting HTC’s sales and regaining balance. HTC’s high-end devices have been doing reasonably well, but the company falls way behind the market leader Samsung when it comes to manufacturing quality lower-end Android devices.
