HTC is hoping the virtual reality market could offer hope for growth in the Middle East as the smartphone pioneer is forced to shed thousands of jobs globally. The Taiwanese company — a trail-blazer in the Android space in particular, thanks to devices such as the HTC Desire and HTC Evo from 2010 — is cutting a further 1,500 manufacturing jobs, equivalent to around a fifth of its workforce, with its current smartphone range largely overlooked by consumers.
“In the Middle East region HTC as a brand has not done well despite (producing) good phones,” Nabila Popal, a senior research manager for IDC in Dubai, told Arab News. This week’s job cuts announcement, which will be implemented by the end of the third quarter, follows the sale of much of the company’s smartphone design division (including the transfer of 2,000 engineers) to Google in a $1.1 billion deal.
The company described the reduction in its manufacturing workforce as “a decisive step in the realignment of resources across the organization, and will allow more flexible operations management.”
HTC shares hit fresh lows this week with the company’s stock having shed three quarters of its value over the past five years. Founded in 1997, HTC was one of the earliest smartphone manufacturers, initially for other companies but subsequently under its own brand.
The company was among the first to introduce touchscreen devices, and thrived alongside BlackBerry-maker Research in Motion as smartphone ownership began to rise in the early 2000s. But despite gaining a 10 percent market share in the global smartphone market in 2011, the company had little answer to the rise of Apple’s iPhone and Samsung’s Galaxy range, with its brand gradually falling out of favor in the Middle East and beyond.
“On the smartphone side, they really haven’t invested in any strong marketing or branding initiatives to build a high end brand image which this region is big on,” said Popal. In the GCC, HTC smartphones accounted for a small percentage of total sales in the first quarter, according to IDC.