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The high-end mobile phone market has failed, and the VR industry has not yet exploded. HTC can only lay off employees to reduce costs through difficult times. However, how long will the transformational pain last?
After reselling some of its mobile phone business to Google last September, HTC reproduces its self-help tricks.
On July 2nd, HTC announced that it will start the organizational optimization policy and abolish 1,500 employees in the manufacturing department to better reduce costs and turn losses into profits. It is planned to be completed before the end of September.
In the statement, HTC said: Believe that this action is one of the necessary steps to achieve HTC's long-term corporate goals, promote continuous innovation and ensure core creative capabilities. At the same time, we are also actively introducing new ideas for innovative factories to the process of intelligent automated production; 2. Refined overall operational planning, once again strengthen the company's future competitiveness.
In September last year, HTC packaged its team that participated in the Google Pixel mobile phone business to Google for $1.1 billion. About 2,000 HTC employees joined Google. It is reported that as of June this year, HTC employees around the world 6450 people. This also means that the HTC's layoffs are not small.
With the current 'T-type' pattern of the mobile phone industry becoming solidified, it is not easy for the old leading manufacturer HTC to compete for market share from the traditional mobile phone field. Previously, it has continued to invest in the VR industry, but it is still difficult.
Similar to Nokia, Motorola, and other well-known manufacturers, HTC's weakening has the impact of major environmental changes, but there are also management decision-making mistakes. Especially in the strategic mistakes in the layout of China's important market, it has to step by step. Backward. From the official point of view, HTC still has confidence in the mobile phone business. Under the current difficult situation, looking back at its path selection in recent years, it has certain implications for the future development of the entire mobile phone industry.
Weak performance, layoffs, cost reduction
Last year, HTC had two eye-catching moves. The first one was to sell the Shanghai manufacturing plant for 630 million yuan in March 2017. At that time, the official explained that HTC's production line is now concentrated in the Taoyuan factory in Taiwan. In addition, it can not only concentrate production, but also improve operational efficiency. In addition, the company also said that 'the tide of the market, the rise and fall of the enterprise is an issue that we cannot avoid, and we will face the challenge with a positive attitude.'
It is worth noting that on July 2, HTC announced that the factory for layoffs is involved in the Taoyuan factory in Taiwan.
Then in September 2017, some of HTC's mobile phone business was sold to Google. It is reported that HTC's two-time sales revenue has been invested in the VR field. Recently, at the World Mobile Conference held in Shanghai, HTC is showing mobile phone new HTC. At the same time of U12+, it also brought Vive Focus, a product of VR field layout, and showed the linkage experience of the two.
During the conference, Wang Congqing, president of HTC China, also gave a speech on the theme of HTC Vive's new ecology, saying that 'will be committed to leading and promoting the deep integration of mobile communication and immersive computing industry'. These actions have revealed that HTC has turned significantly to VR layout. Determination.
However, on June 28th, it also joined the 5G mobile phone R&D wave and signed the '5G Terminal Advance Plan' with China Mobile. In this program, many domestic head brands such as Huawei, vivo, OPPO, and Xiaomi have joined.
At the media communication meeting last year, HTC Chief Executive Chen Wenjun said that the previous chief operating officer did not pay enough attention to the mainland market and missed many opportunities. 'We said that it is to re-enter the mainland market.'
The 21st Century Business Herald flipped through HTC's official social media account and found that the official is still building momentum for the new version of the mobile phone in the near future, and launched a small-scale sweepstakes. In response, some loyal users expressed their regret for the development of HTC today, and some users expressed their views on the new version. Questioning the pricing of mobile phones.
The official website shows that HTC's new U12+ is equipped with the current leading Qualcomm Snapdragon 845 chip, priced at 5,999 yuan. The price is similar to the recent high-end flagship products released by vivo and OPPO, but there is a certain comprehensive performance and design. gap.
While not giving up the mobile phone business, the VR layout has been greatly increased, showing HTC's perception of its future development in the mobile phone field. However, from the current overall layout, the VR industry has not yet reached the point of explosion; its long-standing Adhering to the high-end mobile phone line, it is also difficult to embark on the path of some 'small and beautiful' mobile phone brands.
An industry analyst who did not want to be named analyzed the 21st Century Business Herald reporter. In essence, HTC's large-scale layoffs were reflected in the reduction of sales in the context of sales decline.
The Jibang Consulting Semiconductor Research Center responded to the reporter's report that the recent frequency of HTC convergence new machines and the increase in the proportion of outsourcing OEMs to reduce costs, the most direct impact of these decisions is that the factory and related units must be downsized. HTC has not given up the market for smartphones. There will still be new machines coming out next year, perhaps in the form of its own brand, perhaps through cooperation with Google Pixel.
The agency believes that HTC still has the ability to innovate in research and development, and believes that HTC is bound to think about other developments, such as 5G subjects or AI topics, which may be the next development direction.
Mobile phone + VR self-help road is still difficult
For HTC, a once-popular manufacturer that was once considered by consumers to be the best choice for Apple, the weakness of the giants has brought a lot of enlightenment in addition to the irresistible factors of market changes.
Nuowei Consulting CEO Li Rui reports to 21st Century Business Herald reporters that there are three reasons for HTC's weakness: just to catch up with the brand iteration, the era of domestic brands with cost-effective products; managers' business strategy mistakes, short-term sales budget and personnel Reduced too much; and missed the opportunity to transform or sell several times.
'HTC has its own problems, but the core problem is that these international brands are in the wrong direction, and exit is a matter of time. ' Li Rui explained that HTC's overall personnel quality, product standards are good, and late is mainly strategic mistakes. 'China is still an important market, and it is also a market that HTC pays attention to, that is, the trading method is not appropriate. To apply the operation of the US market to the fast-growing Chinese market, I think it is a clear strategic mistake.
In an interview with reporters, Gartner research director Lu Junkuan pointed out that 'HTC's global expansion has gone a few steps in a row. In the core US main battlefield, it has not stabilized yet, and wants global expansion. I think HTC 'non-Apple After the lord's status was replaced by Samsung, it was the starting point of decline.
The aforementioned institutions also expressed similar views to reporters. They believe that the weakening of HTC can be summarized as the main reason for the loss of patent wars and the mistakes in market decision-making. 'The failure of patent wars has caused HTC to be restricted in the era of high-speed growth of smartphones. Rapid market decline; and market decision error refers to HTC to maintain profit margins, mainly in the research and development of high-end mobile phones, but high-order failure, the majority of low-end market share can not be favored, coupled with the development of hardware technology Gradually mature, the difference between brands is narrowed, and the brand value is not easy to be highlighted.
According to statistics from QuestMobile, a third-party research organization, HTC's share in China's smart terminal market fell to 0.4% in 2017, ranking 12th in the industry.
In contrast, HTC's strong layout in the VR field in recent years has indeed brought about a significant increase in market share.
According to public data, in the first quarter of 2018, China's VR market grew by 200% year-on-year, of which VR integrated machine shipments reached 94,000 units in the first quarter, accounting for 51% of the domestic market, while HTC led by 33%.
According to the high-profile statement of the company's executives on the layout VR, the company is determined to be great. However, it seems that HTC's transformation is still difficult.
Its first quarterly earnings report for 2018 showed that revenue during the period was NT$8.8 billion (approximately RMB 1.88 billion) and a loss of NT$5.2 billion (approximately RMB1.111 billion). Benefiting from last year’s disposal, The company's first-quarter net profit after tax was NT$21.1 billion (US$7.1 billion, RMB4.51 billion), which reversed the previous 11 consecutive quarters of losses.
However, the aforementioned industry insiders interviewed by the reporter expressed a certain degree of pessimism.
The aforementioned institutions told reporters that in terms of the development of VR, the economic scale that can be driven in the short term is very limited. It is very difficult to use VR business as the main source of revenue for supporting HTC.
Li Rui affirmed HTC's spirit of bravely developing and bravely rushing to the unknown. But he also believes that HTC is in the early stage of VR, and the market has not yet reached maturity, although the future VR can be related to the entertainment industry such as film and television, games, etc. Cooperation, but currently does not have high usage rate. 'Especially in terms of carrying the content side, the advantage of the latecomer will be obvious, not the first one.'
In terms of mobile phones, Li Rui believes that HTC should consider repackaging the brand, focusing on the market of people born after 2000, and looking for a grounded gas, to understand the young people in the market leading the company's business, and to save some channels and space for the mobile phone business. Can guarantee that you will not die in the tide, don't burn all the money too soon, if you fall into a big brand, you will have a chance. But you need to break the heavy, re-revolution.