HTC’s smartphone slump continues as company reportedly exits India
HTC has been in a downward slump for quite some time. The company’s revenue has kept on decreasing in recent months. Google bought part of HTC’s smartphone division for $1.1 billion, and the deal closed earlier this year. It helped HTC to achieve a net profit in the first quarter, but worryingly, smartphone revenue kept decreasing, with sales falling by 68 percent in the month of June. Now, a report by The Economic Times states that HTC is exiting the India smartphone market.
HTC has less than 1 percent share of the Indian smartphone market, as per Counterpoint Research, while Samsung, Apple, and OnePlus dominate the premium (₹30,000 and above) smartphone market in India. The Economic Times report states that HTC India’s top management, including country head Faisal Siddiqui, sales head Vijay Balachandran and product R Nayyar, have put in their papers, according to three unnamed senior executives.
The company is said to have asked to its 70-80 member team to leave with a few exceptions such as chief financial officer Rajeev Tayal. It is also snapping all distribution agreements in the country after halting local manufacturing for almost a year.
However, HTC is not yet completely dissolving the Indian operation completely. One of the executives told The Economic Times that the company plans to sell VR devices online with Taiwan completely controlling Indian operation. The Indian operation will be like an extremely small business. Another executive stated that HTC may look at re-entering Indian smartphone market as an online exclusive brand, but that will only be after the company is able to turnaround sales globally as it’s struggling in several markets. As of now, the company is said to be quitting.
In response, an HTC spokesperson told the publication that the company will continue to sell its smartphones in India. Gadgets 360 also got the same response. The spokesperson stated that India is an important market for HTC, and the company will continue to invest in the country “in the right segments” and “in the right time.” Also, the recent reduction in workforce in the India office is designed to “more appropriately reflect local and regional conditions,” according to the spokesperson. There are still more than ten employees in the India office providing full functionality.
The Economic Times report also stated that HTC may run into more trouble in India as some distributors are planning to take legal action for non-payment of dues and not compensating for the stock in trade pipeline. HTC is said to owe money in several crores, according to an unnamed distributor. HTC was nationally distributed in India by Optiemus Group firm MPS Telecom and Link Telecom. In response, the HTC spokesperson told the publication that it is aware of the potential dispute but is yet to comment before it receives full detail.
HTC had also recently announced plans to lay off 1,500 workers, one-fifth of its total workforce. In India, it launched the HTC Desire 12 and the HTC Desire 12+ last month, but the high price tags, lack of marketing, and low price/performance ratio meant that sales have been negligible. The company has also not launched the flagship HTC U12+ in the country yet. The last HTC flagship to launch in India was the HTC U11+ in February.
HTC has not issued a complete response yet to the report. The company, once the top Android smartphone vendor and the maker of the first Android phone, has significantly lost out in the Android smartphone market. We will see how the situation plays out.