Taiwan-based Asustek Computer Inc. is open to the idea of acquiring HTC Corp., which has been struggling to stay relevant in the hugely competitive industry. Asus chairman Johnny Shih has hinted that the company could possibly buy HTC.
The beans were spilled by David Chang, Asus Chief Financial Officer who let on that Shih remarked the same when queried on the possible acquisition of HTC by Asus at the latter's annual general meeting.
"Our chairman has chatted about the topic internally. Still, the chances of an actual takeover are not big as Asustek is a company that has depended on organic growth," said Chang per a Reuters report.
With Asus not completely closed to the notion of acquiring fellow Taiwan-based OEM HTC, this could prove to be a silver lining for the latter. HTC has been struggling with its revenue generation as rivalry in the smartphone space intensifies.
HTC had a gloomy 2014 initially but managed to pull up its socks and churn in profits by Q4 2014. Just as things were seeming rosy for HTC (it reported an $11 million net profit in Q1 2015), the bubble was burst as the company's challenger to the iPhone 6 and Galaxy S5 - the HTC One M9 - failed to find much favor with consumers much to the company's dismay. The successor of HTC One M8's sales did not meet forecasts and expectations from HTC. It was alleged that HTC was reducing the orders for components for the HTC One M9 by 30 percent. As a result, the smartphone maker has predicted a net loss for Q2 2015.
By contrast, Asus is slowly gaining good ground in the Android market thanks to its ZenFone line-up of smartphones. The ZenFone 2 made quite a mark in India and China, prompting Asus to target western markets and launched the smartphone in Canada and the U.S. The company's PCs and notebooks are also finding favor with consumers looking for budget friendly devices that are sturdy.
HTC is hoping to revive its fortunes in the near term with the launch of a "hero product" by this year end. However, with its shares showing a plunge perhaps being acquired by Asus would give the company a new lease of life.
Photo: Guilherme Torelly | Flickr
