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Should HTC Merge With Huawei?

HTC One is a stunning device and the Taiwanese smartphone maker should be real proud of it, but being critically acclaimed doesn’t guarantee commercial success, and that exact same thing has been happening with HTC. The company’s popular flagship smartphone even though has had a positive impact on the finances, has not been enough to pull the company out of the crisis. Now analysts are suggesting that HTC should merge with the Chinese smartphone manufacturer Huawei.

The last two years have seen HTC’s finances fall rapidly even after the company brought changes in its marketing strategies, trying to fight off monopoly from Samsung. The company recently reported operating margins of 1.5 percent in third quarter while, HTC smartphone sales are predicted to stay flat even in the third quarter and this makes matter worse for the company.

To prevent HTC from complete collapse, JP Morgan analyst Alvin Kwock suggests that HTC-Huawei merger could be beneficial for both the companies; HTC brings demand for High end Smartphones and brand image, while Huawei has good hold in the China market and access to financial resources.

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Garter Inc reported statistic that show HTC as the 13th largest mobile phone manufacturer while Huawei is a sixth position. The merger could bring the joint company to 4th position just behind, Apple, Samsung and Nokia.

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