HTC Needs to Reinvent Itself: Last Friday HTC’s stocks dropped 10% after the company reported disappointing results from their Q2 earnings. In the face of the very strong smartphone competition, HTC reported a quarterly net loss of roughly $250 million, which is pretty frightening for a company that, unlike its main competitors, is so heavily dependent on its smartphone segment.
The company named a few reasons for those negative results. The demand in the high-end smartphone market was apparently much weaker than expected, and the sales were overall weak in China, where the array of new players, like Xiaomi and Huwaei, is coming from. Nevertheless, the company also admitted its vital need to reinvent its devices and make them trendier.
CFO Chia-lin Chang also announced, without really getting into details, that the company is currently working on a device with a more “fashionable, and trendy design” that would be coming out during the Christmas holiday season. HTC actually did release its style-focused flagship phone One M9 earlier this year, but it simply wasn’t enough to strengthen and give new energy to its struggling smartphone division.
A lot of things remain to be done for HTC in order to turnaround its business and make it again profitable, which has in fact become the priority at the moment according to Chang. The most interesting part is probably the focus on virtual reality, in which Chang said HTC has an “early mover advantage.” However, the VR market is growing extremely fast and shows us numerous signs of high potential and companies like Samsung and Facebook are already competing in that nascent space. For the moment, analysts remain pretty much unconvinced that its VR division will cause the company to become profitable again in the near-term.