HTC Reorganizes U.S. Operations

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HTC Corp (TPE:2498) is restructuring its business operations in the United States in an effort to prevent the declining sales of the company, according to an internal memo obtained by the Wall Street Journal.

HTC Reorganizes U.S. Operations

Peter Chou, chief executive officer of HTC Corp (TPE:2498) said that the company is creating a new division for emerging devices and it is re-appointing is global president to supervise its operations in the United States.  

Jason Mackenzie will lead HTC America

In the company memo on Sunday, Chou wrote, “Effective immediately, in addition to his current duties in supporting me with global corporate strategy, Jason Mackenzie will lead HTC America.”

In addition, Chou added that aside that the former head of the American operations of HTC Corp (TPE:2498), Mike Woodward will lead Emerging Devices, a newly established business unit of the company. The new unit aims to “focus on innovative new HTC products and global distribution strategies.”

Chou did not provide further details regarding the strategies of the newly established business unit. HTC Corp (TPE:2498) is implementing several steps to improve its business after its disappointing financial performance for the second quarter of 2013.

Financial performance weaker than expected

During the second quarter, HTC Corp (TPE:2498) net income declined by 83 percent year-over-year NT$1.25 billion and its sales also dropped by 24 percent year-over-year to NT$70.7 billion. The financial performance of the company was weaker than expected. Analysts expect the company to achieve a net income of NT$2.17 billion.

HTC Corp (TPE:2498)’s flagship smartphone, the HTC One received positive feedback from consumers. In May, the company sold more than 5 million units within one month after the launching of the product. An executive from the company said that orders for HTC One are pretty good and more than it can supply. Despite the good sales performance of the smartphone, the stock value of the company plummeted to its lowest level since 2005 due to stronger competitions particularly from Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930). The slowing growth of high-end smartphones worldwide also affected the company’s stock price.

In his memo, Chou also appreciated the contributions of Mackenzie and Woodward for the success of the HTC One. He said, “I want to thank these two outstanding leaders for their contributions to the success of the HTC One so far, but as you know and would expect, we also need to do more. With the success of the One, we have many new opportunities both to expand current sales as well as to enter new distribution channels with new business models.”

Furthermore, Chou emphasized that the brand awareness for HTC Corp (TPE:2498) among the youth is 87 percent with 67 percent of the segment believe HTC as a brand “on the up.”

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