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HTC denies possibility of a merger with ASUS

HTC has denied any possibility of a merger with rival smartphone company ASUS, after a statement claimed that ASUS hadn’t ruled out acquiring the struggling handset manufacturer.
June 15, 2015
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Last week ASUS caused a bit of stir by suggesting that it hadn’t ruled out acquiring HTC, although the company later clarified that it had not put a formal bid forward for the rival smartphone manufacturer. HTC has now come out with its own statement, flatly denying that any acquisition by ASUS had ever been on the cards.

“We strongly deny the news. We didn’t contact Asusteck and will not consider the acquisition. As an international brand, HTC will continue to design world-class innovative smart devices through its pursuit of brilliance brand promise,” – HTC

Although a deal was incredibly unlikely as this stage and under these circumstances, talks of a merger have once again highlighted HTC’s precarious position within the smartphone industry. The prominent Android manufacturer has seen its market share, revenues and profits tumble in recent years.

HTC has undergone further shake-ups in the past twelve months. Company Chairwoman Cher Wang replaced co-founder Peter Chou as CEO back in March, as it looks to a new generation of connected products and services for additional revenue. The company suffered its worst monthly financial result in 6 years back in April and saw a slump in Q1 2015 profits. HTC has subsequently written off $93 million of unused production capacity and expects to post another loss for Q2 2015, which could be 30 percent lower than previously thought.

This year’s flagship HTC One M9 smartphone has had its share of ups and downs too. Despite mostly positive reviews and top of the line hardware, consumer interest just doesn’t appear hot enough to produce the sales volume that HTC needs or expected.

In a bid to diversify away from the competitive smartphone industry, HTC has recently embarked on a small selection of spin-off products. The HTC Re standalone camera launched last year, followed by a partnership with games industry giant Valve to produce the Vive virtual reality headset.

It seems that HTC is determined to carry on fighting its corner in the smartphone industry, at least for now. HTC still has plenty of resources as its disposal, but this might not be the last that we hear about acquisitions if the company fails to turn its revenue around in the future. With a worldwide recognised brand name, IP portfolio and a strong Android legacy, HTC probably looks quite appealing to some of the industry’s faster growing manufacturers.