ASUS Is Considering Acquiring HTC
Taiwanese smartphone manufacturer HTC hasn’t been doing so well lately, as the Inquisitr has previously reported. This April marked a six-year low in profits for HTC, with sales of the flagship HTC One M9 failing to measure up to hopes for their flagship device.
HTC has, subsequent to their explosive debut, always struggled to catch up to other major players, particularly Apple and Samsung, something that analysts attribute mostly to a drastically-inferior marketing budget. So, what’s next for HTC, as they circle the drain?
A report from PC World suggests that HTC’s fellow Taiwanese tech giant ASUS (officially ASUSTeK Computer Inc.,) the world’s third-largest PC vendor, is entertaining the idea of purchasing the flagging phone developer. ASUS recently began selling Android-based smartphones and phablets itself, the Zenfone and Padfone series, and is already highly-influential in several major Asian markets, including China and India. They also have a history of working with Google and Microsoft to produce tablets, notably some devices in the Nexus series.
As CNET reports, ASUS Chairman Johnny Shih indicated that he was open to a deal with HTC during ASUS’ annual general meeting, according to Chief Financial Officer David Chang, although he felt that the chance of ASUS acquiring HTC was not especially high.
“Still, the chances of an actual takeover are not big as (ASUS) is a company that has depended on organic growth.”
So, given that ASUS is already a major player and Chang’s outlook, why would they be interested in HTC?
The short answer is market share. ASUS phones are big in Asia, but nearly unheard of in North America. HTC may not command much market share these days (although it is making some recovery), but the HTC brand is highly-recognizable in the U.S. and Canada, and still receives a lot of attention from the high-tech crowd. Although their devices aren’t selling to consumers, tech journalists still consider HTC one of the three major players in the high-end market. Combining HTC’s brand with ASUS’ financial might have the potential to position an HTC/ASUS alliance as a true power in the global smartphone market.
HTC’s stock took a 20 percent hit between Monday and Tuesday, leaving them ripe for purchase by interested parties; if HTC does sell, it will be for, relatively speaking, a bargain price for an established manufacturer of high-end mobile devices.
HTC is remaining relatively tight-lipped about their recovery strategy – or perhaps simply doesn’t have one. “As an international brand, HTC will continue to design world-class innovative smart devices through its pursuit of brilliance brand promise,” said Jeff Gordon, an HTC spokesperson. As MobileSyrup notes that ASUS posted a follow-up to the rumors, indicating that while the company is open to all acquisition opportunities, they are not actively in talks with HTC at this time.