- Jul 21, 2018
Smartphone Maker HTC to Exit India
HTC, the Taiwan-based consumer electronics company known for its smartphones has decided to exit the Indian market. It has laid off most of its 70-80 member team, except some executives. Indian executives like country head Faisal Siddiqui, sales head Vijay Balachandran, and product head R Nayyar have been retrenched while the chief financial officer Rajeev Tayal still remains at HTC India.
After stopping local manufacturing a year ago, it is now ending all distribution agreements. It is not completely dissolving operations in India as it has decided to sell VR devices online, but this would be only a small business. Taiwan will completely take control of the Indian entity.
However, an HTC spokesperson said that the company will still sell its smartphones in India, as it is an important market but this would be at the right time in the right segments.
HTC is losing customers everyday due to stiff competition in the smartphone industry. In June 2018, it was reported that sales had fallen by nearly 68% from $226 Mn in June 2017. The last two launches of HTC’s last two phone launches in India failed to generate any sales due to lack of marketing, as per a distributor.
The reduction in workforce in the India office is because of the change in the local and regional conditions of the smartphone market. HTC looks at this as an opportunity to reach a new stage of growth and innovation. Only 10 employees in India will provide the functions required to reach this new stage of growth.
HTC executives are positive that the company will make a re-entry in the market soon. One executive said that HTC will look at rebranding its phone brand in India as an exclusive online brand after improving its global sales that have been low in the past few years.
However, HTC is already in trouble due to some Indian distributors planning to take legal action because non payment of dues and not compensating for stock in the trade pipeline. The dues are in several crore rupees, as per the distributors. In India Optiemus Group firm MPS Telecom and Link Telecom was the distributor for HTC. The HTC spokesperson said the company is trying to get a comprehensive understanding of the dispute and will work with its channel partners to ensure no disruption of services to customers.
According to a Counterpoint Research report, the smartphone market is dominated by Samsung, Apple and China’s OnePlus. Together they account for 95% of the Rs. 30,000 plus phone segment while HTC has less than 1% share in India. Recently, in a June 2018 report, Counterpoint Research revealed that Xiaomi was the market leader with a share of 57% during Q1 2018, followed by Samsung (14%) and Huawei (Honor) (8%).
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