HTC, China’s smartphone market

According to the HTC China Official Community Announcement, the HTC Official Community will be closed on February 7, 2020, and customers are grateful for their continued interest and support in the HTC Official Community. Users who need it can follow HTC’s official WeChat public number, HTC Official Service Number, for consultation.

HTC, China's smartphone market

In addition, in early January 2020, HTC Elevate community users began to experience access issues when they logged in, and the page then shows that the project is no longer supportive. This community is the only high-end fan and supporter community of HTC resumes registered through invitations.

Struggling mobile phone business 

In a way, HTC had the toughest year in nearly 20 years before shutting down the community.

On January 6, 2020, HTC released its 2019 financial results, showing that HTC’s full-year revenue for 2019 was t$10.01 billion (approximately 2.34 billion people), down 57.82 percent year-on-year and 87 percent lower than in 2017, the lowest in the past 19 years; In terms of, HTC lost Nt$7.05 billion in the first three quarters of 2019 alone.

In response to HTC’s performance in 2019, Bloomberg columnist Tim Culpan points out that its full-year revenue is not even as good as Apple’s earnings from selling AirPods in two weeks, while others believe that much of THE decline in HTC’s performance is due to a contraction in the mobile phone business.

In fact, HTC (HTC International Electronics Co., Ltd.) was founded in 1997 as a manufacturer of mobile phones and tablets based in Taiwan, China. In 2008, HTC’s t-Mobile, the telecom sitt, launched the world’s first Android phone, the T-Mobile G1.

As an early entry into the smartphone space, HTC has also been a strong force in this area, with a market share of more than 9% in the global smartphone market.

In terms of revenue, HTC’s revenue exceeded T$15.55 billion as early as 2001, and in 2011 it recorded t$455.1 billion (approximately RMB106.64 billion) in annual revenue, and has a market capitalisation of more than many major handset makers, second only to Apple at $33.8 billion.

HTC, China's smartphone market

Above, HTC’s 2005-2019 revenue statistics

However, less than a year after reaching its peak, HTC began to fall.

Also in 2011, Apple sued HTC for patent infringement, asking the U.S. to ban all 29 of HTC’s phones. In December of the same year, the U.S. National Trade Commission ruled that some HTC phones infringed iPhone patents and banned HTC-related products. In 2012, HTC’s share of the North American market plummeted from 24% to 6.2%. For the next two years, some of HTC’s products were banned in the UK, the Netherlands, Germany and other countries.

By 2017, HTC has reached an agreement with Google that some members of HTC’s mobile device division will join Google Hardware, while HTC will retain its own mobile brand and some of its teams and will continue to roll out new products. Over the next year or so, HTC did launch several new products based on its own phone brand, but they were far less focused than the $1.1 billion deal.

In 2018, the U.S. International Trade Commission ruled that HTC had infringed two Nokia patents, and in March 2019, the U.S. District Court in Dusedorf, Germany, ordered HTC to infringe the YAG patent.

All in all, HTC, mired in multiple patent disputes, is struggling in the mobile phone market, with revenues shrinking year after year and profits turning steam.

HTC, China's smartphone market

HTC’s current CEO Yves Maitre, pictured with Tech Crunch

In 2019, HTC did not launch its flagship product and closed its official flagship storeon on JD.com and The Tmall. In October 2019, HTC’s new CEO Yves Maitre admitted at a TCD event that HTC had stopped hardware innovation in smartphones and would shift human and financial resources to virtual reality. However, he also said HTC had not completely abandoned its mobile phone business and did not rule out the possibility of HTC laying out high-end 5G phones in high-GDP countries.

All in AR Strategy for Burning Money 

Starting in 2015, as the mobile phone business shrank, HTC began to look to the VR market, with Zhou Yongming, who has been at the helm of HTC for 11 years, stepping down as CEO and taking over as chairman, Wang Xuehong, and the following year, HTC launched the Vive, a high-end VR head-on device, to officially enter the VR market.

In the years that followed, HTC did put a lot of effort into VR and, to some extent, became the industry’s benchmark. According to Strategy Analytics, HTC Vive and Sony PlayStation VR and Facebook Oculus were the top sellers in 2018, with revenueaccounted by 77 percent of the market’ revenue.

HTC founder Wang Xuehong has publicly stated that the company’s memorable products include not only smartphones and VR products. However, the overall development of the VR industry over the years has not been stable, and it may not necessarily hold up HTC’s vision of the sector.

HTC, China's smartphone market

Above, the HTC VR head-on Vive Pro Eye

With a total global financing of approximately $600 million in 2015, global investment in this sector jumped 118.1 percent in 2016 compared to 2015, according to CB Insights, a venture capital tracker for the technology industry. Other statistics suggest an increase of more than 300%. Global VR investment growth has levelled off in 2017 and global investment in VR has started to decline in 2018.

Despite HTC’s track record in VR software and hardware, VR is still a relatively niche market at this stage, and it can’t pull off HTC’s momentum and deliver good-looking earnings. As HTC’s new CEO Yves Maitre reflects:

The decision to devote all resources to VR technology development at the wrong time was one of the reasons for HTC’s rapid decline.

With the arrival of 5G, the VR market seems to have new hope. In 2019, HTC has launched the Vive Pro Eye headshow for the company, and will focus on VR head-on and its applications in areas such as research and development training and education, according to Yves Maitre.

It is worth noting, however, that HTC faces two formidable rivals in the existing market (Sony and Facebook). In addition, some major handset makers are also eager to experiment in VR, such as Huawei’s VR glasses, which were launched in October 2019, and Apple may also launch in the future.

For HTC of All in VR, there may be a fog on the way forward.