“We strongly deny the news. We didn’t contact Asusteck and will not consider the acquisition. As an international brand, HTC will continue to design world-class innovative smart devices through its pursuit of brilliance brand promise.”
That’s in response to last Friday statement of the Austeck Computer Inc. (Asus) chairman Jonney Shih, that even though no formal evaluation has been made, he will not rule out a possible acquisition of the phone-maker HTC. Both companies are Taiwanese and strategically a possible merger could streamline the tough competition on the ever growing smart-phone market, as speculated on behalf of Asus. The latter is a niche where the firm has been trying to enter. Currently ( Q1 2015) the product mix of the firm (ASUS) consists of PC 67%, Mobile 16% (mobile phones and equipment), Components 14%; IOT 3%, as geographically the biggest market is Asia 52% followed by Europe 28% and Americas 20%. The firm was established in 2nd of April 1990, but has only recently entered the mobile phones business. Despite that the company is planning to ship 17 million phones this year, aiming expansion in all of the three major market-segments ( see. http://www.pcworld.com/article/2935312/asuss-shih-leaves-the-door-open-to-looking-at-htc-acquisition.html ). Further more according to the Asus business perspective (Q1 2015) the company plans its Mobile revenue to surpass that of PC’s in 2018, which sounds really ambitious. As of 31.12.2014 (1 €=38,3176 TWD) the company’s financial performance amounts for turnover of around 11,4 bn €, gross margin of around 13% and net income of around 0,5 bn €. The total balance sheet amonts for some 8,7 bn € as the cash and cash equivalent at the end of the year was about 1,9 bn €.
On the other hand HTC has been struggling with declines in both market share and profitability among the tough competition of its rivals including Apple, Samsung, Huawei, Lenovo, Xiaomi and so. On its turn the company (HTC) was founded in 1997 and ever since its product mix has been streamlined around smartphones and their accessories and support. Searching for growth lately the company is also testing new product lines. As HTC announces it since October 2014 it entered a new product category named HTC RETM – which stands for innovative camera and then at the Mobile World Congress 2015 the company introduced HTC GRIPTM- which stands for new performance fitness band and HTC ViveTM- which stands for the World’s most advanced virtual reality system, as the company announces it. And just for a quick glance the current (31.12.2014) consolidated financial performance of HTC stands for turnover of some 4,9 bn€ with gross margin of around 21,7% and net profit of some 0,04 bn € (vs loss of 0.03 bn € for 2013). The total balance sheet is around 4,3 bn €.
Kind regards, Rostislav Dinkov
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