It’s been a tough season for smartphone makers aimed at the China market and that’s something HTC can attest to.
The Taiwan-based smartphone maker will be removed from the Taiwan Stock Exchange’s Top 50 Index, now shifting into the Taiwan Mid-Cap 100 Index. The company’s stock has dropped over two-thirds in the past year as smartphone sales in the region experience a uniform slowdown.
It’s the latest in a series of worrying signals for HTC, which has seen its global market share dwindle in recent years, Once the world’s biggest smartphone maker by volume, they now hold under 2% of the market, dropping out of the top 10.
The indexes, which rank companies according to their market cap, were recently reassessed, and will be reshuffled as of September 21st. HTC’s position on the Top 50 Index will be replaced by fabric producer Eclat Textile.
Last month HTC revealed that it would be cutting approximately 15% of its workforce and hoping to reign in operating expenses by over a third. While all smartphone makers have felt the pinch of a sluggish market, HTC’s outlook has become particularly grim as the market continues to saturate.
Following poor Q2 results this August, the company revealed that it expects to remain unprofitable in the third quarter of 2015. In an attempt to cut off dying limbs, they have decided to axe low-end models, a market now dominated by newer players including market-leader Xiaomi.
According to the report, HTC will be focussing on its premium market, hoping to differentiate itself. However the high end market is also experiencing saturation. Following the lead from Apple, Samsung, OnePlus, Lenovo and Huawei, Chinese smartphone maker Meizu also revealed plans last week to enter the premium market.
According to a report from IDC, smartphone shipments to China are expected to rise just 1% from last year. At the same time, global growth is expected to dip from 27.5% last year to a more modest 10.4% in 2015. Slowing sales have put pressure on smartphone makers that both originate from and target China. Many local players, including market-leader Xiaomi, have opted for a rapid expansion into emerging markets such as India and Brazil to offset the slowdown at home.
HTC would be hoping to shake off their stock market blues with the release of the mid-range Desire 728 phablet in China this week, featuring dual sim slots and a 64-bit MediaTek 728 chipset.
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