Over the past few years, the number of smartphone owners has grown worldwide. Companies like Samsung and Apple have taken advantage of the market’s willingness to buy, pumping out newer models and expanding upon the core line. Other companies, namely Microsoft and BlackBerry, have put forth their best efforts to maintain their slice and stay relevant.
HTC has received much praise and acclaim for the HTC One smartphone, though the company hasn’t been able to compete in the high-end market. To make matters worse, the smartphone market may be reaching a saturation point and slowing down in sales.
Recent research reports indicate that hardware factories in Taiwan have had less demand for high-end smartphones, meaning tougher times ahead for their smartphone developer HTC. The production of branded handsets fell over 21% in the second quarter this year compared to last year.
HTC had more than a 10% world market share of smartphones not two years ago, but as the field quickly grew crowded they were unable to maintain their status. HTC struggled to make their devices stand out and couldn’t market them effectively enough.
The research supports theories that the global high-end smartphone market has peaked. HTC’s flagship smartphone, the HTC One, is considered a peer among the iPhone 5s and Galaxy S4s. The HTC One did manage to drive strong sales after launch, though the interest quickly dropped by the second quarter. Despite the accolades by media and consumers, HTC’s board and top executives are still considering replacing the current CEO, Peter Chou.
Investors have valid concerns. Though Chou is known for high-quality, polished products, the current state of the high-end smartphone market is that of a mature one where yearly upgrades are favored over groundbreaking design.
A recent article by Bloomberg has speculated the likelihood of HTC being bought out by a larger company. Just like with BlackBerry, HTC may very well end up in the belly of a larger, healthier fish. HTC is valued at less than half of its annual sales and it only holds a 3% global market share for smartphones.
It won’t go quickly. HTC executives have a strong belief in their product and are likely to hold out until the bitter end; Just like Nokia did in 2010 and BlackBerry in 2012.