HTC, Lenovo announce job cuts as losses mount in smartphone market battle

Posted:
in iPhone edited August 2015
Asian tech heavyweights HTC and Lenovo have revealed plans to slash their respective workforces and restructure their mobile phone units, moves designed to stem financial losses as the companies struggle to compete in the global mobile marketplace.


Neither HTC nor Lenovo are among the five largest smartphone vendors, according to TrendForce


HTC will trim 15 percent of its workforce --?though it didn't say from where -- while Lenovo will chop 3,200 non-manufacturing roles. Both companies cited streamlining of operations and cost savings as factors driving the decisions.

"Now, as we diversify beyond smartphones, we need a flexible and dynamic organization to ensure we can take advantage of all of the exciting opportunities in the connected lifestyle space," HTC CEO Chair Wang said in a release. "This strategic realignment of our business will ensure that each product group has the right focus, the right resources and the right expertise to win new markets."

HTC has fallen hard in the last few years as Apple and Samsung have essentially taken over the mobile phone market. The company is currently trading below the value of its cash on hand, meaning that investors believe it has no intrinsic value.

Lenovo likewise didn't specify from which unit it would cull jobs, but its mobile business group --?which now includes Motorola --?will undergo restructuring after posting a pre-tax loss of $292 million in Lenovo's first fiscal quarter of 2015. The company is currently sitting on unsold smartphone inventory worth $300 million, which it will write off.
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Comments

  • Reply 1 of 27
    SpamSandwichSpamSandwich Posts: 31,131member
    Ouch! Although it should be recognized that most large companies are going to be downsizing because of reduced demand. The massive Baby Boomer population is retiring and dying off, which is having the net effect of reducing customer demand. This is happening also in other countries. Look at China and Japan.
  • Reply 2 of 27
    Profit matters, bitches!
  • Reply 3 of 27
    Quote:

    Originally Posted by SpamSandwich View Post



    Ouch! Although it should be recognized that most large companies are going to be downsizing because of reduced demand. The massive Baby Boomer population is retiring and dying off, which is having the net effect of reducing customer demand. This is happening also in other countries. Look at China and Japan.

     

    Did Asia have a baby boom? I would think that Chinese movement into higher socioeconomic strata would negate that.

  • Reply 4 of 27
    Did Asia have a baby boom? I would think that Chinese movement into higher socioeconomic strata would negate that.

    Type "china population trends" into Google and the first result will be a Google chart showing the sharp downward trend.
  • Reply 5 of 27
    MacProMacPro Posts: 18,259member
    Fixed heading

    [SIZE=4]"HTC, Lenovo announce job cuts as losses mount in smartphone market [S]battle[/S] rout"[/SIZE]
  • Reply 6 of 27
    tmaytmay Posts: 3,762member

    http://www.asymco.com/2015/08/10/the-new-switchers/

     

    Apple is converting a good portion of first time Android buyers to iPhone.

  • Reply 7 of 27
    gatorguygatorguy Posts: 20,617member
    On a slightly related note there's industry chatter that Google may be returning to the China market, first by rolling out a new official China Google Play Store with the governments blessing. Rumor says it happens sometime this year. If it does and Google joins Apple, Microsoft, and other big techs there cue the hypocrisy claims.
  • Reply 8 of 27
    tmaytmay Posts: 3,762member
    Quote:

    Originally Posted by Gatorguy View Post



    On a slightly related note there's industry chatter that Google may be returning to the China market, first by rolling out a new official China Google Play Store with the governments blessing. Rumor says it happens sometime this year. If it does and Google joins Apple, Microsoft, and other big techs there cue the hypocrisy claims.

    How wonderful.

  • Reply 9 of 27
    gatorguy wrote: »
    On a slightly related note there's industry chatter that Google may be returning to the China market, first by rolling out a new official China Google Play Store with the governments blessing. Rumor says it happens sometime this year. If it does and Google joins Apple, Microsoft, and other big techs there cue the hypocrisy claims.

    Any online sources of these rumors?
  • Reply 10 of 27
    ksrkksrk Posts: 4member

    The bills of Android OEMS have come due now!

     

    1000+ OEMs making 20K types of phone!

     

    Watch how they start dying off now.

     

    When they got android free in the initial days, they thought the free OS , with their skins is the way to smartphone sales and revenue glory for ever.

     

    But the only thing they achieved was to kill their differentiation from each other .

     

    The future is slowing sales an profits disappearing even faster.

     

    Time to reap what you have sowed!

  • Reply 11 of 27

    I'm curious how aggressively Samsung will shift from Android to Tizen on its phones.

     

    URL: http://www.cnet.com/news/samsung-co-ceo-we-want-tizen-to-be-on-everything/

     

    One 'thermonuclear' scenario regarding Apple & Google:

      1. Samsung moves all phones to Tizen

      2. The other low-end Android phone makers exit

      3. Apple shifts iPhone search away from Google (to other 3rd-party or its own solution)

  • Reply 12 of 27
    gatorguygatorguy Posts: 20,617member
    Any online sources of these rumors?
    http://www.digitaltrends.com/mobile/google-play-may-be-back-in-china-soon/
    BTW that particular article to me looks to be based on a translation of an original report from China I had read earlier.
  • Reply 13 of 27
    calicali Posts: 3,495member
    Any online sources of these rumors?

    cultofknockoff, knockoffrumors and 9to5knockoff to name a few.
  • Reply 14 of 27
    slprescott wrote: »
    I'm curious how aggressively Samsung will shift from Android to Tizen on its phones.

    URL: http://www.cnet.com/news/samsung-co-ceo-we-want-tizen-to-be-on-everything/

    One 'thermonuclear' scenario regarding Apple & Google:
      1. Samsung moves all phones to Tizen
      2. The other low-end Android phone makers exit
      3. Apple shifts iPhone search away from Google (to other 3rd-party of its own solution)

    I think 1 & 2 are unlikely, and 3 is a wild card.
    Samsung appears to be chicken when it comes to pulling the trigger. How much of their sales comes from their brand power vs offering Android? Heads they win, tails they miss their estimates for the quarter, but something tells me Wall St. will be ultra-forgiving.
  • Reply 15 of 27
    maestro64maestro64 Posts: 4,570member
    The end results of the race to the bottom, getting rid of people you can no longer pay who make your product. They are in the death spiral.
  • Reply 16 of 27
    sog35 wrote: »
    All premium Android makers are doomed.

    Once the iPhone6 came out their fate was sealed.

    LOL very dramatic. Have you ever thought of writing episodes of Game of Thrones?
  • Reply 17 of 27
    brucemcbrucemc Posts: 1,527member
    Quote:

    Originally Posted by Slprescott View Post

     

    I'm curious how aggressively Samsung will shift from Android to Tizen on its phones.

     

    URL: http://www.cnet.com/news/samsung-co-ceo-we-want-tizen-to-be-on-everything/

     

    One 'thermonuclear' scenario regarding Apple & Google:

      1. Samsung moves all phones to Tizen

      2. The other low-end Android phone makers exit

      3. Apple shifts iPhone search away from Google (to other 3rd-party or its own solution)


    1. Likely to take a long time, or never.  First phone not forecast to hit until Q4 this year.  Though perhaps the security issues of Android will spur them on.

    2. Doubt the low-end will abandon Android.  The high-end (and upper part of the middle) are the ones getting really squeezed.

    3. Could happen - we see little moves to reduce dependence upon a separate search engine in general.  

  • Reply 18 of 27
    tmaytmay Posts: 3,762member

    I will be interesting to follow the Galaxy buzz before and after the release of the IPhone 6S. If in fact Samsung cannot sustain pricing power on the Galaxies even for a few months, then I would expect them to see much reduced financials for the next two quarters. 

     

    After that, Samsung will have to introduce yet another product update. Seems like a 6 month product cycle might end up actually exacerbating the pricing pressure, accelerating their downward spiral.

  • Reply 19 of 27
    dasanman69dasanman69 Posts: 12,980member
    slprescott wrote: »
    I'm curious how aggressively Samsung will shift from Android to Tizen on its phones.

    URL: http://www.cnet.com/news/samsung-co-ceo-we-want-tizen-to-be-on-everything/

    One 'thermonuclear' scenario regarding Apple & Google:
      1. Samsung moves all phones to Tizen
      2. The other low-end Android phone makers exit
      3. Apple shifts iPhone search away from Google (to other 3rd-party or its own solution)

    What would be the benefit of switching to Tizen? Controlling the OS? Do you really think that will matter, or make a difference?
  • Reply 20 of 27
    dasanman69dasanman69 Posts: 12,980member
    sog35 wrote: »
    All premium Android makers are doomed.

    Once the iPhone6 came out their fate was sealed.

    LOL very dramatic. Have you ever thought of writing episodes of Game of Thrones?

    Long drawn out deaths don't make the cut in GoT.
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