The company announced:
… a program of business realignment that positions the Company for significant profitable growth with a leaner and more agile operating model.
The program includes the establishment of new business units, to create greater focus and profitable growth in our key areas of premium smartphones, virtual reality, and connected lifestyle products.
This realignment will also involve a streamlining of operations to result in an expected reduction in operating expenditure of 35%; this includes an expected 15% in headcount.
Research firm IDC recently released its smartphone market share analysis for the first quarter of 2015. HTC was not among the largest vendors, which included Samsung (25%), Apple (18%), Lenovo (6%), Huawei (5%) and LG (5%). The major difference among the leaders is that Apple growth year over year for the quarter was 40%, a sign of the massive success of the iPhone 6 and iPhone 6 Plus. In the relentless cycle of product upgrades, HTC has fallen hopelessly behind. Even Samsung has learned the problem of missing a cycle of a strong smartphone product introduction. For a time, Samsung dominated Apple. However its new Galaxy S6 has been a failure.
Just a year ago, analysts who follow Apple were concerned that the iPhone 6 and iPhone 6 Plus might do poorly compared to its predecessors. It sold 10 million units over the first weekend it was out. Apple’s last two quarterly reports showed the product has been an extraordinary success.
HTC does not have the products, balance sheet or distribution outlets to make a comeback. The current layoffs are likely a sign of more to come.
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