HTC COO latest to step down from smartphone maker

HTC said COO Matthew Costello will be leaving the company, the latest in a string of high-profile executive departures for the smartphone maker as it works to regain market share and sales momentum on the back of its flagship One smartphone.

"Matthew Costello will relocate back to Europe for personal family reasons," the company said in an email to Dow Jones Newswires. Costello will stay on as an executive adviser to the company. HTC said that Fred Liu, who is president of engineering and operations, will take over the COO role. The news was first reported by Bloomberg.

Costello had been with HTC for three years, and he was part of a leadership team that helped HTC rise to prominence as one of the dominant smartphone players in the world, only to see its market share erode under intense competition from larger rivals Samsung Electronics and Apple (NASDAQ:AAPL). According to research firm IDC, HTC's global smartphone market share has slipped to less than 4.2 percent from 10.3 percent in the third quarter of 2011.

Costello's departure comes shortly after Chief Product Officer Kouji Kodera left the company, along with Jason Gordon, HTC's vice president of global communications, President of South Asia Operations Lennard Hoornick, and other lower-level executive departures. HTC CEO Peter Chou has indicated he will step down if the One does not help revive HTC's fortunes.

In an interview last week with AllThingsD, Jason Mackenzie, HTC's president of global sales, sought to put the departures into context and suggested that the media was blowing them out of proportion.

"HTC has been around for 15 years now, so it's still a relatively young company, and still a company where it feels like a family. It feels like a mom and pop organization because many of the founders are all still there. And so it's tough when we lose one employee; we're like that," he said. "But the news around this 'mass exodus' has really been overblown. We're a big company today and we've lost a few people. Some were planned and some were not. But it's not masses of people."

The company did get several bits of bright news. First, Verizon Wireless (NYSE:VZ) confirmed via Twitter that it will start carrying the One later this summer, though it did not give pricing or availability information. Verizon, the largest U.S. carrier, was not one of HTC's initial partners for the One. (AT&T Mobility (NYSE:T), Sprint Nextel (NYSE:S), T-Mobile US (NYSE:TMUS) and Cincinnati Bell currently sell the One.) Mackenzie noted that the One is available on at least 220 operators around the world and HTC will work to expand that number.

HTC also announced that revenue for May came in at close to $970 million, its highest monthly revenue in 11 months. HTC has indicated that its second-quarter revenue will be higher than the weak first quarter thanks to the One.

Mackenzie said HTC's goal is now to build a stronger brand. "We have to build a strong product brand and build demand from consumers who are going to walk into those shops asking for the HTC One," he said. "And this an area where we're really trying to learn, and get better at be more innovative about how we're creating that consumer demand so that we can great products like the HTC in as many customers' hands as possible."

For more:
- see this Bloomberg article
- see this MarketWatch article
- see this The Verge article
- see this Verizon tweet
- see this AllThingsD article

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