To survive HTC could merge with a Chinese smartphone maker, but is that possible?

by: Gary SimsAugust 1, 2013

HTC One X Logo aa 6 1600Whenever I have written about HTC I have tried to remain upbeat, I like the brand, I like the phones. Even when the company posted quarter after quarter of declining revenue I reminded myself that the company was still making profit, a profit in the millions of dollars. But since HTC is likely to post its first operating loss ever, it is time to think more soberly about the future.

What if the HTC One and the other products that HTC is designing aren’t able to change the companies fortunes. What next? Other than outright bankruptcy and closure, there is the possibility of a merger, or a full blown takeover. But the question is who? Which handset maker would be the best fit to merge with or acquire HTC.

Most analysts are suggesting that a Chinese maker would be the best fit. A couple of weeks ago an analyst from JP Morgan Securities Ltd suggested that HTC should merge with Huawei and this week pundits quoted by the Wall Street Journal are adding Lenovo to the list.

Joining with a Chinese company would give HTC better access to the huge Chinese market. Also Taiwan and China speak the same language making “doing business” much easier. But historically there have been tensions between the two countries and China has stated repeatedly that its goal is to regain control over the island. This would make any such merger almost impossible from a political standpoint. However according to the Taiwanese Investment Commission, a merger between HTC and a Chinese manufacturer would be technically possible as there is no limit to the amount of Chinese capital which can be invested in Taiwanese companies operating in the smartphone sector.

But in reality HTC should look elsewhere for a partner. Possible suitors would be Nokia and Pantech. Nokia is struggling in the smartphone market and there have been repeated calls for Nokia to release an Android based smartphone. By merging somehow with HTC (which incidentally also makes Windows Phone based handsets) the two could make Android and Windows Phone handsets while decreasing manufacturing costs. Pantech is South Korea’s third largest handset maker which has also had previous financial troubles. By linking up with a Korean partner HTC could retry entering the Korean market.

It might be way too soon to be talking about mergers and acquisitions for the struggling smartphone maker, but maybe there should be some quiet (but brilliant) negotiations going on in the background.

Who do you think HTC should talk to?

  • Влатко Стојанов

    To survive HTC only need to update their phones…

  • menvert

    To survive they only need to get a removable battery and SD card Slot… ONLY reason I left them for samsung, HTC interface is much better hardware much better….

    • nebsif

      guess its too much for their engineers, look at how “mini” the One mini is despite the sealed unibody.

    • Kepas

      It`s not the reason. The main reason is that it just can`t compete with Sammy, because it`s more popular! C`mon, Samsung ad`s are everywhere, now compare it to HTC, you may get only 1/10 of that part compared to Samsung. But that`s only in USA, many many countries doesn`t have HTC commercials AT ALL, when Samsung commercials are almost all around the world.
      So the main reason why HTC struggles is brand recognition and not that SD cards or removable batteries, I don`t think regular consumer even cares or knows about these features, before they get it already.

      • menvert

        I haven’t seen a single samsung add actually, but advertising clout can be a big factor, but I am just saying, I love HTC device but only those 2 things stopped me, it’s a real shame

        • MasterMuffin

          Has your computer and TV been broken for years?? :)

    • Leave it in the past

      Utter rubbish, that’s just your antiquated pet feature. Nobody cares about those things and they’re irrelevant to smartphone market now other than a a small niche of malcontents.

      • menvert

        It’s not antiquated, I have both features in my S3 so yeah whatever, I’d have much preferred an HTC, but they simply find such practical features too much challenge. Just saying In my case that is exactly why they lost my business, not meant to invalidate your personal ideals.

        • Rafael

          the last good phone from them was HTC Sensation, after that??? downhill….why they used to dominate android? cause they listened to the customers and their needs and paired it with incredible makeship and internals to die for. that level of going all out somehow it got lost in translation….and i tend to believe what the “disgruntle” employees said, that Cho changes everything at the last minute….why Cho doesn’t listen to customers and his tech gurus wanting to make a product who is lights ahead, instead of the “yes, yes, yes” crowd????

          the one was a product that was supposed to be release around 1 1/2 years ago, but instead they went out with that plethora of One Xs….and that is their declined….they did not listen to the public and neither paid attention to the world

          today we are living in a world that is shrinking…and somehow manufacturers have to release a product that is the same everywhere….look at case in point the HTC Butterfly….how come it has sd card in the asia market and not here in the international or usa market???? tell me why?? if they would have release one butterfly and mesh all the internals of both units into one cohesive phone, then that phone would have been the one who gives the run for his money to GS3 or GS4

          • Amine Elouakil

            HTC Choice for not including an SD doesn’t come like that, you think you are smarter than the people that design this phones and make these kind decision ? all the data they collect from you or the studies they make, customer satisfaction and so on proves that the average western customer doesn’t care about SD and that’s why the iPhone is selling like hot potatoes, and trust me if Samsung wasn’t the biggest producer of SD card and if they weren’t in that business the S4 would not have one.

            Why HTC Business is not doing good then you’d ask me.
            There are 3 factors :
            1- Marging, HTC does NOT make alot on the one the thign cost to much to make, Samsung on the other hand has a huge marging to begin with on the phone, and all it divisions makes profit because half of the components comes from those same divisions.
            2-Due to low marging and thus low income the advertisement budget is low aswell, and what make it worse is that HTC is used to sell due to it reputation and we have competitor such as Samsung hiring people and paying top $ so these people post negativity on HTC Phones destroys it reputation and impact directly it sales
            3- Lobying, with big player like apple or samsung interfers in the supply chain of HTC, that is on both side, components and carriers, by making exclusive deals, and making and so on.

      • panic room

        what you say about others says a lot about you.
        utter rubbish ? yes, you are.

    • pancake

      htc need to listen to their customer. that should be a good start.

      • Rafael

        what customer wants?

        stock android
        camera that works under all conditions
        sd cards
        and unlocked
        with the latest chip available
        screen 4.7”
        and better sound

        i guess that pretty much all the bullet points, right???
        how can a company messes up on all??? there’s no way in hell someone could miss that.

        i would say get cho in the CHOpping block and get someone who can make better business savyy decisions

        • Amine Elouakil

          That’s what YOU want, I don’t want SD card (slow, brings performance issues for example) instead I would prefere high capacity and especially high performance nand.

          I don’t like stock android, I don’t like to constumise everything, purschase launcher and wallpapers and stuff just to make suite my liking, Sense is to my taste and offers a good experience(not perfect) from the get go

          Camera on the one is fine trust me.

          And people complain so much and they don’t buy, I’ve tons of comments and still see them about HTC One not having a pure android, and what the hell is the HTC One Google edition? I see alot of people complaing about SD, and battery capacity, then what the hell is the Butterfly S is about ! it has SD it is has 3100mAh battery, it has everything the One (appart from the aluminium) has it has 1.9Ghz Snapdragon yet people like you still wine about HTC not making the phone for them

    • Amine Elouakil

      The average consumer doesn’t care about SD and removed battery I remind you that the most selled smartphone doesn’t have either of those, what HTC needs is marketing which they don’t have tons of money for because they don’t make product with big marging, the One isn’t a product that they make marging on unlike Samsung plastic S4

  • Joachim Nilsson

    Merge with Nokia already, come on!

    • Dimitar Gospodinov

      and do what? alluminium windows phones? that will pull them out no doubt :-D

      • MasterMuffin

        Already done, Lumia 925

        • Amine Elouakil

          the 925 is still a plastic phone with alumunium sides

          • MasterMuffin

            He didn’t say full aluminium :)

          • Amine Elouakil

            you and me know that he meant something like the One which is a full aluminium phone :)

          • MasterMuffin

            True dat :D

          • Amine Elouakil


    • Rafael

      i am with you, this is one merger that shows a little more progress….i like the take of nokia on their cameras and that technology, and then the design and android part will be tackle by htc, and put in there a qualcomm chip the latest and awesomeness…..and make sure, that the wheels of updates keep churning and going instead of one update and you are done type of mentality, which bods well for customer satisfaction….and you’ll see that at the end, you don’t need too much marketing cause the marketing will be word of mouth.

    • casualsuede

      I agree with you on this. Include Blackberry, and they would play in 2 OS’ (dump the BB OS) and could have an enterprise layer that was as good or better than what Samsung or Apple could provide.
      But again, they would be a one trick pony. The Smartphone market dives, this company would be the first to suffer.

  • dave

    Apple should buy htc

    • rijoenpial

      And do what rip them apart and nobody would hear from them again?! Apple is a one company show, and they are rather proud of that! Cheers

      • dave

        They’re already doing business together and if apple diversified and put their own spin on an android device, it would probably do well… In fact it makes me think of the htc one!

    • rijoenpial

      Come to think of that, so is Samsung! HAHAHAHA

    • EvenInTheDarkestHour

      Not a crazy idea…That would give Apple a face saving avenue into Android. Wouldn’t that be grand?

  • rijoenpial

    I think Samsung could benefit from absorbing HTC and finally have an S5 with the aluminum polish and design… I don’t like aluminum in phones very much, as it makes them heavier and transfer too much heat to the hands, but if they manage to make a removable aluminum cover, I i would be pleased… Also, touchwiz and sense together would make wonders… Cheers

    • Rafael

      that is one merger i would not back….the reason is that samsung is monopolizing the market at 48%, which also bods bad to technological improvements….since they know people will flock into their coffers, but look at this year, for their lackluster effort, people know when they have a so-so product….so, i go for a htc nokia merger….that will be an awesome way to show samsung to better get on with the game cause they have a rival

    • casualsuede

      Samsung would never change their design ID. If they took out HTC, it would be to get rid of competition. HTC’s One has one of the highest production costs in the world. Samsung is making much more money on their Galaxy series in bill of materials, so why would they make a device that would bring less money per device?

  • keith

    If the only thing for htc to survive is to merge, its better if nokia and htc will. They will share the fone capbilities. Nokia is one of the best windows phone in the market and htc can add some of its features. Vice versa on the htc on android, nokia can put any additional enhancements or anything. Nothing will harm one another. Its better i think.

  • Barend Stapelberg

    The problem is not their hardware, but their lack of marketing. Samsung is a marketing powerhouse and manage to sell tons of plastic crap. HTC needs marketing

    • keith

      Dude you really dig that in the “plastic crap” . I dont really know why people want plastic crap. for a phone that is too expensive that its materials use is too cheap. People nowadays always sought to what is popular not the quality.

    • Rafael

      marketing is not the all hail solution to everything….why did you heard about htc on the first place??? because they had wonderful phones and incredible customer service….

      two areas that has really going down for htc.

      customer service: they don’t listen to what the market wants and certainly they don’t listen to us whining about an update…updates comes scarse or in some instances never, look at all the lines that has only ONE update vs the updates on samsung….look, gs3 has went to 3 or 4 (i believe, correct me if i am wrong) iteractions of updates, htc butterfly??? i would bet none. and that is a better phone than gs3 btw. you see my point.

      and….phones, they are missing key ingredients that would have made their phones awesome….sd card, and that decision to go for ultrapixel (which in my book is not bad but they should have waited until they had something like 10mp ultrapixel or something like that which is more paletable than say 4mp)

      • casualsuede

        Actually lack of marketing is the reason.. HTC has much less Awareness amongst general consumers than Samsung, Apple, even LG. Part of it comes from the fact that these brands also play in other fields, but the truth is HTC is outspent in everyway possible and the marketing they have done has proven not to be sticky with the general public.

        You mention “hearing of HTC” to a forum of phone fans. Those who aren’t phone fans don’t live in your world. Most of them would not mention HTC, many of them have never heard of them and over 95% of them would not know what HTC brand was about.

        Your complaints on updates and SD cards and Batteries apply only to a small percentage of users. there is mounds of research that show that the things you mention have very little impact on buying decisions of mainstream consumer.

        I’d share the research, but it belongs to my market research company.

  • Amine Elouakil

    HTC is fine for now, even if they start losing money campanies like BB or Nokia been losing money for half a decade and yet they still there and doing their stuff, if HTC merge with another company it’s their death

  • Rafael

    interesting that you noted NOKIA….they are making extremely awesome progress in the realm of phone camera, plus the expertise of the design and tweaks of sense and settings from HTC, it could be a great merger and a good combination.

    the only serious question would be, is it too late for both companies?

    i personally would like to think not…but they have to hurry up….cause the more they wait and the more they keep messing up their individual companies with products that are somehow lackluster (i understand people like the One, but the camera was a caveat or a low point compared with samsung, which by the reviews of certain platforms including this one it was highly consider the best well-around phone camera in the android ecosystem).

    they need to show chutzpah or cajones and seriously produce something spellbinder…look at moto, they are releasing a phone that is somehow (judging by the leaks and information, not based on the reality which we’ll know soon enough) awesome in terms of camera 10mp and good pictures in dark places???? if it would have been a product like that, then people would have flock….and don’t get me started with sd cards, which has been over and over and over again one item of discussions in this outlets which has been the determining factor in whether or not to get a phone. and some people that says “oh nooo is not a factor” are lying themselves!

  • guest

    Not really related, but Nokia and Blackberry should merge and make android phones :D

    • kimLJT

      but even they won’t merge just make an android phone it will surely be likely they will survive or best can reign their crown again specifically Nokia :)

  • roiji

    Asus maybe? haha too far-fetched’

  • Authority of your mom’s baseme

    More drivel from a sewer dwelling website. The way you refer to yourself and HTC is comical, as if it matters what you think. This whole blog post is pure bs, speculation, and conjecture. Sadly typical of this pos blog.

  • Authority of your mom’s baseme

    HTC will be fine. This know – nothing blogger is an idiot.

  • Authority of your mom’s baseme

    Delete my comments all you like. This article is bs and speculation and the author is an idiot. HTC will be fine. The merger rumors are started by “analysts” and idiot bloggers.

  • Doesn’t matter if HTC makes the most beautiful phones on the planet if they ignore what the customer wants.

  • Ruz

    How about partnering with an Indian company which could be Micromax?

  • Anonymous

    The obvious candidate for a merger (not a take-over) would surely be Asus? Asus know a bit about building tablets – they make the Nexus 7 – but have had trouble with phones, while HTC has never made it into the tablet market. And, of course, Asus is also Taiwanese.