HTC says won't consider merger with Asustek

By MoneyTimes

Jun 16, 2015 08:27 AM EDT

Last week, Asustek Computer Inc (Asus) chairman Johnny Shih in an internal company meeting had suggested that it may be a possibility to buy Taiwan-based smartphones and tablets manufacturer, HTC. However, HTC came out with its own statement on Monday, saying it will not consider a merger with Asus and also pointed out that no formal or informal talks had ever taken place in connection with the said acquisition. 

Shih had chatted about the topic internally, Asus chief financial officer told Reuters. Asus later said it has no current investment plans in HTC.

"We strongly deny the news. We didn't contact Asustek and will not consider the acquisition," HTC in a statement said on Monday. It further said "As an international brand, HTC will continue to design world-class innovative smart devices through its pursuit of brilliance brand promise."

The merger talks which Asus has once again brought HTC's plight to the forefront as it keeps losing money, while it desperately tries to gain momentum in the smartsphones industry. For HTC to make its presence felt in the smarstphone industry, it will most likely take years to build as the prominent Android manufacturer has seen its market share dip and its revenues and profits slump in recent years. 

In the past six years, HTC has been in rapid deceleration mode and to top it off, the company recorded its worst ever month this April along with a dip in profits in Q1 of 2015 and it is also expected that Q2 of 2015 will be a loss-making quarter for the company. It is also predicted that the loss HTC will make in Q2 of 2015 will be 30 percent lower than the original figure quoted. 

HTC was founded in 1997, selling one out of every ten mobile phones in the world at that time. It is looking to reclaim its name as one of the top smartphone manufacturers with its latest offering - HTC One M9. But industry experts have predicted that competition from Apple, Samsung, Lenovo, Xiaomi and other will make it tough for HTC to bounce back in a short time. 

This being said, HTC is preparing for an uncertain future with Cher Wang, who was designated as the new chairperson of HTC back in March. The company has also stepped up its game plan with the launch of a virtual reality headset and a standalone camera.

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