HTC under pressure to look for partner after quarterly losses

Taiwan’s HTC Corp slid into the danger zone for the first time in the third quarter, compelling the company to think about new partnerships.

Like other strugglers in the sector, HTC has been laid low by the product and marketing might of Apple Inc and Samsung Electronics Co Ltd – woes that have been exacerbated by supply chain constraints and internal turmoil.

But where Nokia Oyj has fallen into the arms of Microsoft Corp and Blackberry Ltd is now in play with one disclosed offer and another being considered, HTC has stuck to its guns that it is not for sale despite what analysts call an increasingly bleak outlook.

HTC posted a quarterly operating loss of T$3.5 billion on Friday as sales tumbled by a third from a year earlier, underscoring a dramatic decline for a company which boasts award-winning smartphones but has failed to develop a durable brand image.

“Fundamentally there are a lot of things that need to be fixed,” said Laura Chen at BNP Paribas, adding that HTC needed to work on marketing, supply chain management and streaming its product line. “No sign of recovery anytime soon.”

HTC’s troubles have pushed its shares down some 55 percent for the year to date and sparked calls for the company to consider a radical overhaul. A JPMorgan note in July called for the company to look at merging with China’s Huawei Technologies Co Ltd.

Huawei has since said it is not planning to acquire another smartphone maker to grow its market share.

Responding to growing speculation about a possible merger, Cher Wang, HTC’s low-profile chairwoman and co-founder, has repeatedly ruled out selling the company and has said a low share price did not bother her.

Wang hails from an entrepreneurial dynasty and her father, the late Wang Yung-Ching, was the founder of Taiwan’s Formosa Plastics Group. She currently owns 3.8 percent of HTC and has built a reputation for no-nonsense simplicity and cool-headedness in the face of pressure.

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