HTC CEO Chou knocked by insiders who say he's part of the problem

HTC CEO Peter Chou has said he has no plans to step down and the company is making progress in turning around sales through its flagship One smartphone and its variants. However, a portrait painted by an in-depth profile of Chou by Reuters indicates that insiders in the company view Chou as an obstacle to a revival in the struggling company's fortunes.

HTC peter chou


Reuters interviewed a dozen former and current HTC executives to get a sense of how Chou's style and presence affect the company. Unnamed insiders describe a chief executive with a meticulous attention to detail who can draw up new products on the fly, but also one who lacks a long-term vision and has fostered confusion among different managers and departments within the company.

"The weak point is they don't really have a long-term strategy," one former unnamed executive said. "It used to be a strength, and now is becoming a weak point as they don't have a clear direction going forward."

According to Reuters, two to three years ago, when the smartphone market was growing at a faster clip than it is now, HTC's on-the-fly approach--epitomized by Chou's move to draw up plans for the Sensation XL smartphone and then push it to market just months later--helped the company grow. "Having the ability to just tear up a plan and say, OK, this is the new thing and we're going to get it done fast. That's Peter," said another unnamed former senior foreign executive.

However, the company's growth stalled starting in late 2011 as Samsung Electronics increased its marketing for its Galaxy line of Android smartphones. HTC also faces pressure from Apple (NASDAQ:AAPL) in the high-end of the smartphone market and Chinese vendors Huawei and ZTE on the low-end.

HTC warned recently that it could post an operating loss for the third quarter, which would be its first since it became a public company in 2002. The smartphone maker also said it will release more mid-tier products to help improve its business.

According to the report, Chou did not foster an open environment within the company despite pledges to do so (he said in an internal August 2012 memo that HTC needed to "kill bureaucracy"). And he openly chastised managers and overrode their decisions, usually with little input. The report also said  Chou kept his sales, product, marketing and design executives separate and sometimes had multiple teams working on the same thing.

"HTC's board and broad employee base remain committed to Peter Chou's leadership," HTC said in a statement to Reuters. "The HTC One product family--which has been met with accolades by media and consumers alike--was a result of Peter's vision and leadership, and speaks for itself."

The report said even Chou's critics say he is key to the company's identity and that they can't picture HTC coming up with hit products without him. Further, several executives said there is no obvious successor to Chou. The company has said it has no plans to sell itself, though as Bloomberg notes, citing an analysis from Sanford C. Bernstein, companies like Huawei and ZTE could view HTC as an acquisition target.

HTC recently hired actor Robert Downey Jr., star of the "Iron Man" and "Sherlock Holmes" film series, to be the spokesperson for a new advertising campaign aimed at restoring luster to the company's brand. The company is also keeping its powder dry for a larger marketing blitz for the 2013 holiday shopping season.

For more:
- see this Reuters article
- see this The Verge article
- see this Bloomberg article

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