Source: Wall Street Journal By Lorraine Luk
TAIPEI—In a move that underlines the pressure facing Taiwan’s HTC Corp., its chief executive said in a rare memo that the smartphone maker has “slowed down” and urged its more than 16,700 employees not to be swayed by “noises from the market and the industry.”
The internal memo, seen by The Wall Street Journal on Wednesday, comes at a time when the smartphone maker is struggling to regain its competitiveness after losing ground against Apple Inc. AAPL -0.34%and Samsung Electronics Co. in the lucrative market for smartphones.
HTC has seen its global smartphone market share fall by nearly half since the second quarter of last year, and the company warned this month that its third-quarter revenue will fall significantly from the second quarter. Its shares are down about 50% so far this year, raising speculation among industry analysts that HTC could become a takeover target due to its cheap valuation.
“Do not be influenced by noises from the market and the industry. We are a strong player in the market and we are just having short-term challenges,” Chief Executive Peter Chou said in the memo, sent by email to HTC’s staff last Thursday.
Mr. Chou, who has been with HTC since the company was founded in 1997 and has been in the CEO post since 2004, maintains a high profile in Taiwan, where HTC is one of the biggest employers. He is fluent in English and a Harvard alumnus, and his presentation style is widely compared in Taiwan with that of the late Apple co-founder Steve Jobs.
Mr. Chou insists on using English as well as Chinese as the company’s working language, which is rare in Taiwan. The memo he sent to employees was written in English.
His management style was evident in the memo when he urged employees to prioritize and make sure to execute on goals in a timely fashion.
“Please make sure that we kill bureaucracy. Make sure [that] we are doing the right thing quick and make it work,” he wrote.
Mr. Chou also said in the memo that HTC needs to improve its quality, brand awareness and internal communications in order to stay competitive.
“HTC used to be a company where we did things quick and reacted quick. However, the fast growth from the last 2 years has slowed us down,” he wrote, conceding the company didn’t have strategic direction. “We agreed to do something, but we either didn’t do it, or executed it loosely.”
An HTC spokeswoman, Jessica Pan, confirmed the details of the internal memo and said it was aimed at boosting morale.
Founded in 1997, HTC began as a contract manufacturer of cellphones for many Western carriers and started making its own phones in 2006. It was one of the early adopters of Microsoft Corp.’s Windows phones and Google Inc.’s Android operating system. Until early last year, it was the biggest Android smartphone maker in the U.S., but it began losing traction after Samsung aggressively pushed out its Galaxy line of smartphones, also based on Android.
To reverse the slide in sales, HTC has shifted its focus to China and India. Analysts say the company still lacks flagship models that are likely to take off in overseas markets. Moreover, they said, the Chinese mobile-phone market is dominated by models in the low- to mid-price tiers, so HTC’s strategy to compete through high-end models may not pay dividends.