TAIWANESE PHONE MAKER HTC has revealed plans to close its office in South Korea due to fierce competition from Samsung.
HTC has long struggled with low handset sales in Korea as it tried to compete against native Korean phone makers LG and Samsung. Last year, HTC had a two per cent share of the smartphone market in the country, which dipped to just one per cent in the first quarter of 2012. Now the firm apparently has decided to bite the bullet, announcing the closure of its South Korean office.
"This is a hard decision that has direct impact on people who have contributed to the growth HTC has experienced the past several years," the company said in a statement, adding that moving out of Korea will "increase efficiency for our business operations in the future". HTC didn't mention whether the closure of its office will lead to redundancies.
Kim Sang-pyo, an analyst at HMC Investment Securities told The Korea Times that HTC's lack of 4G models has lead to its ultimate downfall in Korea.
"The current trend in smartphones is to buy a long-term evolution (LTE) model, which is a market dominated by Samsung, LG and Pantech in Korea," Sang-pyo said.
"Consumers just don't feel the need to look for a fourth company to buy LTE phones from when the three already have strong brand images."
This announcement follows HTC's closure of its main office in Brazil in June, after its share of the smartphone market there dipped below one per cent. µ
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