HTC One And First Spark Disaster; Staff Flees

HTC has confirmed its now-former CEO of HTC Asia, Lennard Hoornik, left the company last week. That's after simliar departures by HTC's Vice President of Global Communications, Jason Gordon and the company's Chief Product Officer Kouji Kodera. It doesn't help that HTC's Head of Global digital Service, Elizabeth Griffen, is also planning to leave this week.

It's a trend which has been hitting the vulnerable company for the past few months, and, combined with HTC's failing HTC One and HTC First phones, it has put the company in disaster mode.

It wasn't supposed to be this way. The Taiwanese company was placing its hopes on a resurgence after releasing its well-reviewed HTC One and First phones. But external factors, ranging from the economics of mobile phone manufacturing to Facebook dropping an apparent Facebook Home exclusivity for the HTC First after a week, have exacerbated the company's already bad internal problems - ranging from management to supplying phone demand.

"Anyone who's heard of them in Seattle doesn't want to go work for them right now. They're like T-Mobile two years ago," an anonymous source familiar with the matter said to The Verge. "They're in utter freefall."

So what happened to HTC? Well, in a sense, Samsung and Apple - the two largest mobile phone manufactures out there. The success of those two companies is largely attributed to not phone design, but manufacturing management as well. It's no secret that Apple and Samsung both have billions of dollars at their disposal. Billions that they put towards keeping a tight manufacturing chain which allows them to produce their own chips, processor and displays for mass consumption in a short amount of time.

This strong manufacturing structure, however, isn't the case for HTC, which is currently struggling to supply its HTC One phones.

Then there's the Android - the operating system HTC uses for its phones. The Android environment hasn't been kind to HTC due to the plethora of cheap Android devices and the near-total market dominance by Samsung. And the Samsung factor cannot be overstated: the South Korean company currently holds a whopping 95 percent of the global Android market.

To get around that market dominance, HTC focused on exclusive software, particularly for its HTC First. The first became the first phone to feature Facebook Home, an apparently exclusive feature for a period of time. That period of time, Facebook decided, was less than a week.

"Since then, rumors have suggested that the First is hovering near death amid poor sales - rumors bolstered by a quick price cut from $99 to just 99 cents on contract," The Verge's Chris Ziegler said, quoting a source who later called the phone "a disaster."

Then there's the management of HTC. Sources speaking to The Verge paint a picture of HTC's founder and CEO, Peter Chou, as making snap decisions, and pushing forward with the release of the One even after staff alerted Chou of supply problems.

While those supply problems have been addressed - the production of the phone is to double - it still may not be enough to stave off its competitor, the Samsung Galaxy S4.

For a company which makes only $2.88 million in profits its first 2013 quarter, that could be a death sentence.

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