HTC: Asus Can't Buy Us - InformationWeek

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6/15/2015
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HTC: Asus Can't Buy Us

HTC issued a thanks but no thanks-style response after an Asus executive floated the idea that it could purchase the smartphone manufacturer.

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HTC issued a thanks, but no thanks type of response after an Asus executive floated the idea that it could purchase the smartphone manufacturer.

Beleaguered smartphone manufacturer HTC issued a strong statement Monday, rejecting an overture from an Asus executive who suggested the PC maker was interested in buying the company.

The fracas started this past Friday, June 12. The original statement that started the acquisition talk came from Asus chairman Johnny Shih, when the company's chief financial officer David Chang told Reuters that Shih had indeed commented on a possible acquisition.

"Our chairman has chatted about the topic internally," Chang said, according to the Reuters report. "Still, the chances of an actual takeover are not big as Asustek is a company that has depended on organic growth."

The statement was enough that HTC, which has been struggling to find its place in a smartphone market dominated by Apple and Samsung, issued its own statement on Monday, June 15. The smartphone manufacturer fired back with a note on its investor's page clarifying the company's stance in response to Asus's unofficial acquisition offer.

HTC's One M9 smartphones have not excited users. (Image: Eric Zeman for InformationWeek)

HTC's One M9 smartphones have not excited users. (Image: Eric Zeman for InformationWeek)

"We strongly deny the news. We didn't contact [Asus] and will not consider the acquisition," the HTC statement read. "As an international brand, HTC will continue to design world-class innovative smart devices through its pursuit of brilliance brand promise."

In theory the two Taiwanese companies could be a good match. HTC's stable of smartphones could expand Asus's portfolio. Asus is better known as a maker of tablets and personal computers.

In the meantime, HTC's fortunes continue to fall. The company saw its stock take a 10% dip after it reduced its second quarter revenue outlook by nearly a third, blaming softer-than-expected demand from China.

In its notes, HTC outlined four key business goals for this year. These include strengthening the competitiveness of its smartphone business, reducing operating costs, increasing operational efficiency, improving organizational alignment, streamlining business processes, and developing new business opportunities beyond smartphones.

Some analysts believe HTC's problems extend beyond marketshare woes -- indeed, a Gartner report in May found the smartphone market grew 19.3% during the first quarter of 2015, due in large part to growth in emerging markets. HTC, it seems, has not been able to break into these markets as well as some of its competitors.

While HTC handsets run Google's Android operating system, which is found on many lower-cost smartphones, HTC has gone after the high-end market with models like its flagship One M9, which, despite good reviews, has failed to find favor with consumers.

[Read about HTC's latest smartphone.]

"Traditional smartphone makers like HTC think as long as they make the best hardware, they'll be able to sell well," Wanli Wang, an analyst at Taipei-based CIMB Securities, told Reuters earlier this month. "That's just not the case anymore."

An unlocked version of the smartphone goes for $649 and features dual front-facing speakers, 5.1 channel Dolby Audio Surround, an all-metal unibody design, and a Qualcomm Snapdragon 810 octa-core processor.

Despite the impressive hardware specs, consumers have not warmed to its supplementary user interface, Sense, which is designed offer users an additional layer of customization.

Nathan Eddy is a freelance writer for InformationWeek. He has written for Popular Mechanics, Sales & Marketing Management Magazine, FierceMarkets, and CRN, among others. In 2012 he made his first documentary film, The Absent Column. He currently lives in Berlin. View Full Bio

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