Daily Management Review

HTC's Revenue in 2015 Decreased by 35%


After failure of its flagship smartphone, One M9, HTC expected to improve their position with the new model One A9, but even those plans went awry. Contrary to rumors, November last year proved to be unsuccessful for the manufacturer, as well as all the previous months. In December, the situation with sales only worsened. The hottest shopping season has brought HTC just $ 195.7 million in revenue, which is 57.08% less than the same period in 2014.

For the full 2015, revenues decreased by 35.24%, reaching about $ 3.65 billion, based with Taiwan dollars at the current rate. HTC has suffered serious losses, the exact size of which is not reported yet. Now the manufacturer put high hopes on the head-mounted display Vive. The competitors’ Oculus Rift and PlayStation VR are scheduling market launch for April.

Earlier it was reported that HTC, being in a difficult financial position, sells one of its offices to the compatriot Inventec. The latter will use the property for its server business.

DigiTimes writes citing Inventec’s message that the company buys HTC’s production and office building located in Taoyuan (northern Taiwan), for NT $ 6 billion ($ 184.5 million). The complex covers an area of 5.58 hectares and has a floor area of about 120 th. sq.m. The transaction is expected to be closed in the spring of 2016.

Inventec, dealing with contract assembly of various electronics, intends to use HTC’s property for accommodation units for production of customized servers, which are now located in two offices.

DigiTimes’s industry sources say that lately Inventec received quite enough orders from brands such as HP, Dell and Lenovo. According to the Economic Daily News, Inventec is the world's largest contract manufacturer of servers with a market share of about 30%.

Despite all the problems that HTC is experiencing now, the company's brand will never be ditched, and the Taiwanese manufacturer will continue to work in the smartphone market. This was stated by Chairman of the Board of Directors and CEO of HTC Cher Wang, in response to Reuters’ publication predicting imminent termination of the vendor's business.

Moreover, according to Ms. Wang, HTC is going to take on a leadership role in development of virtual reality devices. The first such product is the Taiwanese brand - helmet HTC Vive - will go on sale in April 2016.

"HTC ,which is now tolerating losses, is already on its last legs, as cash holdings of $ 1.3 billion is gradually drying up," - wrote a journalist Robyn Mak.

She also mentioned analysts' forecasts, who are expecting HTC to keep the smartphone market share at the level of only 1% in 2016. For loss-making brands such as HTC and Sony, the game may already be over, says Mak.