Will HTC meet the same fate as VIA?
The China Post news staffThe question of whether HTC — and its share price — will meet the same fate as VIA (威盛) now looms again in the minds of the investing public, amid reports of the handset maker's ailing performance and the eruption of defection scandals within its corporate leadership.
September 29, 2013, 12:03 am TWN
Both companies share the distinctions of being founded by Cher Wang (王雪紅) and of once enjoying the title of “crown jewel” of the Taiwanese market, at one point leading the local index in share price only to dramatically fall from those commanding heights.
Veteran traders still remember witnessing VIA's share price fall rapidly from its height at around the NT$600 mark over a decade ago to the NT$20 mark, where it still lingers today. Similarly, HTC shares tumbled from their 2011 apex at around NT$1,300 to about NT$130 recently.
The year 2013 was lauded by HTC as one of redemption, with the company placing all its hopes on its new One flagship smartphone in hopes of recovering from a lackluster 2012. However, the company's fortunes continue to wane, with supply chain issues plaguing sales during the flagship's debut in March. Six months later, supply chain issues came back to haunt the company's release of the One Mini, a smaller and lower-priced variant of the new One. Reports point to a casing shortage arising from design difficulties, rendering the company unable to fulfill consumer and telecoms carriers' orders for the handset.
The honeymoon period for the global smartphone boom may be over, with competition heating up as the sector becomes saturated. Companies who could not adapt swiftly soon found themselves beleaguered, as seen in the examples of Blackberry, Nokia and Motorola, who all dominated the mobile device market at certain points.
Perhaps a revision of strategy is needed for handset makers, as it seems that the business model of launching a few high-end handsets with the most cutting-edge hardware, flanked by a myriad of mid- to low-end models every cycle is no longer wise or sustainable. With the exception of avid Apple fanatics, consumers no longer unthinkingly purchase each season's “hero device” upon launch, rendering the hardware arms race a fruitless pursuit.