The HTC One M9 received positive reviews but was criticized for being too similar to the M8. Credit: HTC
The financial future of smartphone maker HTC appears dire, analysts say, even as the company has remained upbeat.
Some analysts want HTC, based in Taipei, to go private amid a crowded and competitive smartphone market so that it is easier to innovate.
Other analysts hope HTC can drastically boost its marketing dollars for its Android handsets like the HTC One M9+, released in May, to compete with top Android maker Samsung and a crowd of Chinese low-cost handset makers like Huawei, Lenovo and Xiaomi.
One analyst sees a degree of potential for HTC with an expected upcoming phone running Windows 10 Mobile, but that's hardly the majority consensus of seven analysts interviewed for this story.
"I suppose miracles can happen, but the best outcome for HTC would be an acquisition," said Horace Dediu, an analyst at Asymco, who had predicted HTC's demise nearly two years ago.
Given its recent downward market trend, "HTC's already considered hopeless," Dediu added in an email to Computerworld.
HTC basically worthless
HTC has seen a 60% drop in its stock this year, pushing its total market value to below the amount of its cash on hand, a situation that means investors view its brands and physical plant as basically worthless, Bloomberg reported late Sunday.
On Monday, HTC's total market capitalization (its stock price times outstanding shares) dropped to NT$47 billion (about US$1.5 billion), just under the NT$47.2 billion in cash that HTC last week reported it had for the end of the second quarter on June 30.
Recent trading on the Taipei Exchange has seen HTC's stock decline 4.5%.
Last week, in its second-quarter earnings report, HTC reported its revenues dropped by nearly half year over year to NT$33 billion, while operating profit fell to minus NT$5.1 billion. Earnings took a dive to a NT$8 billion (US$257 million) loss.
The company reported weaker than expected demand for high-end smartphones and weak sales in China. It also said it has begun to implement company-wide efficiency measures to reduce operating costs.
Cher Wang, HTC's chief executive, called the current market climate "challenging" in a statement. Still, she added, in a flurry of optimism that analysts found remarkable, "I am confident that our smartphone phone and connected devices strategy is the right one for HTC."
A dramatic decline in HTC revenues started at the beginning of the second quarter, when year-over-year revenues declined by 39% for April and then bottomed out at a decline of 60% in June.
HTC did not respond to a request to comment on recommendations to sell or go private.
Sign up for MIS Asia eNewsletters.