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Taiwan’s bourse removes HTC from index
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TAIWAN’S stock exchange has removed smartphone maker HTC from its index of blue chip companies, signposting the dramatic decline of a business that once ranked as the island’s No. 1 brand and dazzled consumers with some of the world’s first Android handsets.
The exchange removed HTC from its FTSE TWSE Taiwan 50 index yesterday after the company’s market value declined below the level required for inclusion in the market benchmark.
The index lists Taiwan’s 50 biggest companies which together represent 70 percent of the market’s value.
It’s a humbling comedown for a firm that once sold more than one in 10 phones worldwide.
In the past several years, HTC has struggled because of marketing and supply chain glitches as well as intense competition from Apple, Samsung Electronics and Chinese mainland makers such as Xiaomi. Last month, it announced a 15 percent cut in its staff of about 15,700 after a second-quarter loss of US$247 million.
“They made a lot of missteps, but they were also caught in the crosshairs of a shift to commoditization of the market,” said John Brebeck, senior Taipei adviser with Hong Kong investment consultancy Peace Field.
HTC, an 18-year-old company that started out doing contract work for other high-tech firms, came out with its HTC Magic phone in 2008. It ran on Google’s Android operating system when other vendors were still working on feature phones — the kind with buttons rather than touchscreens. Company revenue shot up 93 percent in 2010.
By early 2011 those handsets, backed by a reputation for lightness and technical quality, had taken HTC to its world market share peak of 10.7 percent.
That year New York-based consultancy Interbrand ranked HTC as the No. 98 brand worldwide. That laurel cast the company whose initials stand for “high tech computer” as a model for an island dependent for decades on high-tech contract work but with few globally known brands of its own.
HTC’s decline began as the number of smartphone vendors surged along with total shipments that reached 1.2 billion units last year, up 28 percent over 2013.
Samsung and Apple captured the United States through sales contracts with wireless carriers while Chinese mainland brands such as Lenovo and Xiaomi led in the mainland as HTC was trying to establish a customer base. Its world market share is estimated now at 3-4 percent.
HTC attributes its losses to slowing use of high-end Android phones, changes in its product line-up and increased competition.
It will keep working on high-end handsets along with connected devices and “virtual reality,” the company’s media office said last week.
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