HTC, once among Apple’s top rivals in the smartphone market, is laying off a quarter of its workforce. This is just the latest step in the slow collapse of the Taiwanese company.
This isn’t the result of some terrible misstep. There just doesn’t appear to be room in the current phone market for anyone but Apple, Samsung, and China-based phone-makers.
HTC not what it once was
Although not really a household name, this company made the very first Android model, the HTC Dream (aka the T-Mobile G1) back in 2009. As recently as 2011, HTC was the third-largest smartphone-maker in the world. It was behind Apple and Samsung even then, though.
Since then, the company has struggled to remain competitive. Its HTC One line has seen lackluster demand, as potential buyers preferred the iPhone or Galaxy S models.
HTC manufactures the Pixel line of Android smartphones for Google. And just last year, Google bought most of the Taiwanese company’s phone designers for $1.1 billion to help make more Pixels models. Good news for Google, but that was 2,000 employees gone from HTC.
Add in the 1,500 about to be laid off, and the company will be down to a head count of around 4,000, according to Reuters. Mix in some restructurings and high-level resignations and it’s a recipe for a company on the brink.
Just no room for HTC
In the fourth quarter of last year, HTC shipped about half a million phones globally. For comparison, Apple shipped 77 million, and Samsung shipped 74 million. The three biggest Chinese phone-makers combined for about 96 million. At this point, HTC’s total shipments are equal to a rounding error for its competitors.
It doesn’t help that the global market for smartphones has plateaued. There just isn’t the growth there used to be, for two reasons. One is that most of us in the developed world already have a smartphone.
The other reason is that a great many people are satisfied with the phone they already have. As noted by an IDC analyst: “The abundance of ultra-high-end flagships with big price tags released over the past 12-18 months has most likely halted the upgrade cycle in the near term.”
So HTC can’t find consumers who need to buy their first smartphone, and there aren’t as many people looking to upgrade. That’s makes keeping afloat very hard.