Taiwanese tech giant HTC has finally shut its mobile handset operations in India. HTC India’s top management, including country head Faisal Siddiqui, sales head Vijay Balachandran and product head R Nayyar, have put in their papers.
Earlier this year, HTC had sold off its design team to Google for $1.1 billion. While other Chinese brands such as Xiaomi and Vivo are witnessing exponential year-on-year growth, HTC exit may be described as more of a failure on the part of the brand to judge the competition as well as grasp the market realities.
As per the CMR Mobile Industry Consumer Insights Survey, a pan-India consumer survey conducted independently by CyberMedia Research in early 2017, Samsung, Apple and HTC were rated by consumers as the most successful mobile brands in the first decade of smartphones in India. Seventy eight per cent of those surveyed named HTC as one of the most iconic brands in India, with HTC’s brand pull being pinned down to its innovativeness, its design and looks and up-to-date technology.
HTC has asked its 70-80 member team to leave with a few exceptions such as chief financial officer Rajeev Tayal. According to a report in ET, the Taiwanese firm, however, is not yet dissolving the Indian operation completely. “It plans to sell virtual reality devices online with Taiwan completely controlling Indian operation. This will be like an extremely small business,” ET quoted one of the executives as saying.
HTC might re-enter Indian smartphone market as an online exclusive brand, but that will be only after it’s able to turnaround sales globally as the brand is struggling in several markets. “As of now, it is quitting,” one of the executive told ET.
“HTC as innovative it was in technology could not match it with innovations in the business model or execution. Think of any business innovation, it was either too late to adopt or else didn’t participate at all. This was the main reason for HTC to chart out a different trajectory as against the market movements,” said Faisal Kawoosa, Head, New Initiatives at CMR.
While smartphone innovation, and the constant battle for ‘latest specs’ is centric to a brand success, it is critical that it goes hand in hand with consumer as well as market understanding and underlying market realities. HTC’s most recent mid-range smartphone launch, the HTC Desire 12+, failed in getting its pricing right. At around 20,000 rupees, it did not offer a compelling reason for consumers to opt for it. Other mobile handset brands offer far more, at far lesser prices.”
HTC’s exit is indeed an unbecoming event for the smartphone industry in India. However, it is leaving behind a lot of learning for others who are also feeling ‘suffocated’ due to various reasons that may not just be disruptive, but destructive as well.